Kiwis cutting back on credit cards

New Zealanders are restricting their use of credit cards, even as other electronic cards are becoming more popular for making payments.

MasterCard said figures from Statistics New Zealand (SNZ) and the Reserve Bank showed that while overall card transactions were growing, monthly spend on credit cards remained lower than it was 12 months ago.

SNZ figures showed the total value of electronic transactions in the rolling 12 months to the end of February rose 2.2 per cent from a year earlier to $57.47 billion, while the number of transactions rose 6.4 per cent to 1.1b.

But Reserve Bank figures put credit card billings for the year to the end of February at $28.32b, down 2.1 per cent.

"We think this is indicative of cardholders taking stock of wider economic conditions and consciously choosing alternate electronic payment options," MasterCard said today.

Outstandings on New Zealand cards had remained relatively flat since the global downturn, which generally indicated a conscious effort by credit cardholders to reign in the amount they revolved and therefore lower the amount of unsecured debt they needed to service.

At the same time, overall household debt continued to grow around 2.7 per cent compared to the same month last year. In January household debt was up $387 million on December to $178.68b.

Total household debt was growing at much faster levels than outstandings on credit cards, MasterCard said.

"That is, in turn, reducing the proportion of household debt made up by consumer credit cards with balances accruing interest which, in January fell to 1.96 per cent of total household debt."

- NZPA