Reserve Bank figures released today show there was $6.04 billion outstanding on domestic credit cards at the end of May. Photo / 123RF
Reserve Bank figures released today show there was $6.04 billion outstanding on domestic credit cards at the end of May. Photo / 123RF
Credit card holders have been repaying what they owe with month-end balances getting smaller, however, there's a small but growing value of debt that's more than 90 days past its due date.
Reserve Bank figures released today show there was $6.04 billion outstanding on domestic credit cards at the endof May, down 16.6 per cent from the same month a year earlier, and only 5.2 per cent higher than April, when the Covid lockdown saw balances fall to the lowest since October 2012.
While credit card holders have generally been deleveraging, there's a growing core of borrowers getting further past their due date, with $71 million of advances later than 90 days. That's unchanged from April and up from $57m in the same month a year earlier.
Standard credit card rates have barely budged this year at 19.2 per cent in April and May, down from 19.5 per cent in the first three months of 2020.
Lenders have also scaled back the total credit available this year, with $23.16b available on the plastic. Total credit card facilities have been expanding since July 2010, peaking at $23.43b in December.
That month was also the peak of how much was drawn down by credit card holders at 31.9 per cent. That rate had dropped to 26.1 per cent at the end of May.
Domestic billings on locally issued cards rose to $2.82b in May from $1.78b during April, but still well off the $3.54b spent in May 2019.
The data follow Stats NZ figures on credit and debit spending in May, which showed credit card transactions remained elevated – accounting for 64 per cent of transactions in the month – albeit off the 68.5 per cent peak in April.
