Falling to pay off the credit card balance in full is likely to have cost Kiwis $700 million last year, according to figures from Canstar.
The consumer research firm estimates New Zealanders whacked over $43 billion on the plastic in 2017 - a rise of nearly 50 per cent since 2009.
Jose George, Canstar's New Zealand general manager, said credit card spending had sky-rocketed since the global financial crisis and poor financial habits was costing people millions of dollars in interest payments.
"Based on the last 12 months, we've paid around $700 million in interest payments."
"In the post-GFC years, we've increased our appetite for spending, but unfortunately, not for paying it back."
George said typically Kiwis carried over around 63 per cent of the balance on their cards and despite low interest rate cards being on offer many still chose rewards over interest rates.
"In recent years a number of credit card providers have introduced more low rate/low fee options to consumers, but visits to our website suggest that credit cards offering rewards, and often higher rates of interest, remain the most popular option for Kiwis."
Its research suggests reward cards only start to offer value to those who spend at least $8000 a year on the plastic and pay off their balance in full every month.
Those who don't face losing more money on fees and interest than they gain in rewards.
"Credit cards can be beneficial financial tools if used well, but discipline around spending as well as paying off outstanding balances is paramount in order to steer clear of debt," George said.
He urged those carrying debt on an existing card to consider a balance transfer to a lower interest rate card or to consolidate debt with a personal loan or lower interest credit facility.
Credit card tips
• pay your balance off in full
• consider a low-interest rate card
• weigh up the fees and interest costs with the rewards
• get a card that suits your spending habits