There are times when a person reaches a solid, incontrovertible, life-changing moment. For John Mayweather (not his real name), it came when he had run up a $50,000 debt.
The 39-year-old telecommunications specialist loved buying electronics - and his browsing in a national retail chain of electronic goods inevitably turned into purchases.
Even worse, he amassed much of his debt on in-store cards, using a finance company - with the repayments attracting 26 per cent per annum in interest.
The moment came after he'd bought a laptop and several other items; he realised he had to stop: "I was lucky, I knew someone who worked at Westpac who told me about their balance transfer offer," he says. "They told me how I could shift my debt to a much, much lower interest rate."
Mayweather had already paid off a slab of his debt, and is finding other ways to clear the rest, but decided to shift $1800 of debt to the balance transfer offer. It allows new and existing customers to transfer outstanding balances on hire purchases, store cards, other bank credit cards and personal loans to a Westpac credit card - paying only 1.99 per cent per annum for 12 months on the balances transferred (lending criteria applies).
Westpac recommends anyone having trouble with their payments to talk to their bank to help manage their budget and pay off their debt. Balance transfers are one option; there is also a range of products and services to help people understand their spending to avoid getting into debt in the first place.*
December usually sees a spike in spending producing a traditional $100m rise in credit card debt, another reason for Westpac's balance transfer offer - designed to help Kiwis manage debt at a much lower rate (www.westpac.co.nz/bt)
Shane Howell, Westpac's Chief Product Officer, says sales levels over the holiday period typically rise by about $1 billion in December, with credit card spending making up just under half of that figure. Over the past year, card spending in New Zealand rose by about 6 per cent with credit card spending up 11 per cent in the same period.
"That 1.99 per cent has been great," says Mayweather of the balance transfer rate. "It has made an enormous difference to me. I had been building up that debt over about 10 years - but this time I have been able to bring about some real consolidation.
"While I have had debt consolidation before, this time I feel there has been a real change.
I don't feel the incentive to go out and buy stuff any more. It was just so easy to go into the store, apply for finance and get approved.
"Now I go into that store and browse and come out again without buying anything; previously, I would always come out with something I'd bought when I just meant to browse. It's a big change for me; it feels good."
Even after the 12 months of 1.99 per cent interest expires, Mayweather says his debt goes onto a 13.45 per cent rate on a low rate card - "still way better than the 26 per cent I was paying." Westpac also offer a 5.95 per cent per annum balance transfer which applies for the life of the balance transferred.
"For the first time, I feel like I am making a real dent in things now, my wife is happier and I have learned that consumers need to shop around a bit and do their research. I am not knocking the finance company involved - it was my decision - but there is a lot of information for consumers to wade through and you have to do that to make sure you are not disadvantaging yourself."
Research house Canstar, in a survey held in the middle of last year, estimated New Zealanders pay about $2 million per day in interest payments on credit cards, much of it charged at 18-20 per cent.
Howell says credit card rollover balances (the amount of debt cardholders pay off over time) have been staying more or less level in recent years, demonstrating generally better management of the little plastic cards by Kiwis.
"However, despite this, the traditional Christmas blowout means there is a genuine need for a balance transfer offer which helps people through these times - and helps others who run up a debt over a larger period of time."
*Westpac offer money management workshops and a new money management app, CashNav, which tracks spending and help customers better understand where their money is going. It's free and is currently being used by around 80,000 customers. (www.westpac.co.nz/cashnav)