New Zealanders opt for traditional borrowing
New Zealanders opt for traditional and more structured forms of borrowing in wake of recession
AUCKLAND, 29 January 2010 – New Zealanders are choosing more traditional and structured forms of borrowing over the plastic fantastic.
Latest data from leading credit bureau Veda Advantage shows more and more New Zealanders are choosing to purchase goods and services by way of hire purchase or personal loan rather than a credit card.
The figures show an increase of 27.75 percent in those applying for hire purchase in December 2009 over December 2008 and a massive 119 percent increase in those applying for a personal loan over the same period.
This contrasts with a 26.01 percent fall in the numbers of people applying for a credit card in December 2009 compared with December 2008.
Veda Advantage Managing Director John Roberts says the figures show that New Zealanders have responded to the economic down turn with a more conservative approach to their financial affairs.
“People still want and need to borrow money but many now want a formal regime of repayment and they want to know when they have paid off their debt – people don’t want to see their personal debt spiralling out of control. The growth of Scheme Debit cards issued by the major banks also reinforces this shift of New Zealanders wanting to be in control of their financial situation.”
However the data also shows that some behaviours change little with applications for mortgages up 28.93 percent in 2009 over 2008.
Mr Roberts also observes that “the tough economic times are far from over with significant numbers of individuals and businesses still failing to pay their debts.”
The number of commercial defaults increased by 38.46 percent in the year 2009 compared with 2008 while consumer defaults were up 8.86 percent.