Jack Morrison refuses to pay interest on his credit card.
He's not a rebel; just a smart credit card user. Even after New Zealand's traditional Christmas blowout in spending (our national credit card debt usually rises by about $100m each December), Morrison is steadfastly avoiding paying interest.
That's because he and his wife Erica (not their real names), since 2015, have geared their Westpac credit card to be the payment option for almost everything they spend - food, retail, household bills, Christmas shopping, travel, insurances...everything.
They pay off their monthly bill in full by the due date of their billing cycle - thereby avoiding interest. Even better, all their throughput on the cards (Morrison, a technology and information security specialist, estimates their average monthly spend to be between $4000-$5000) earns Airpoints and hotpoints, meaning not only is their credit card balance reduced to zero every month, they profit by redeeming points for national and international flights and other rewards.
The Morrisons hit on the idea after returning to Auckland from living overseas: "We decided to use our banking and our payments system so that it worked for us," says Morrison. "If you can set up a card with a limit that accommodates your average monthly spend and you bring your balance down to zero at every billing period, it really becomes beneficial.
"Everything we spend - even insurances - is tied to my credit card and my rewards. A really good feature is that you are allowed to gift Airpoints to anyone in your household. In some schemes, only the cardholder could benefit.
"Air New Zealand make it really easy to redeem Airpoints on their website; we are off to the South Island this weekend and the nice thing about using Airpoints is you don't mind spending a little more to get a flight that suits - not a red-eye or one at a ridiculously early hour."
It's not the only way to be clever with your card. Christmas always produces a spike in spending and credit card debt, which is why Westpac has introduced a 1.99 per cent per annum interest for 12 months balance transfer offer. That's designed to help that $100m Christmas blowout, so Kiwis can 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. Total spending by New Zealanders was up by about 6 per cent in the year to December with credit card spending up 11 per cent in the same period.
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 more New Zealanders are cottoning on to the advantages of operating their cards as the Morrisons do - but there is still a need for products like the new 1.99 per cent per annum for 12 months balance transfer offer.
"There are other advantages too," he says. "Our cards give access to Airpoints and hotpoints and if you have our Platinum or World cards, travel insurance is free if you use them for booking travel."
Using credit cards in this way also helps establish an excellent credit record. The cards have built-in protection against fraud and many come with other protection consumers often overlook - like Westpac's Platinum and World cards which offer extended warranty insurance and purchase protection insurance.
But, for many, after New Zealand's $100m Christmas, the ability to control and dilute debt is paramount. The balance transfer offer gives Kiwis the chance to pay low interest on balances transferred to a Westpac credit card while paying down their debt. Lending criteria applies.
Westpac and ZM are also holding a competition where four people can win $5000 each to help 'Pay Back Summer'. Click here for more information. Terms and conditions apply.