Kiwis Paid $7 Billion In Credit Card Interest Over 10 Years As Banks Profit

New Zealanders have paid approximately $7 billion in credit card interest over the past decade - an average of $557 million per year flowing directly to bank profits - according to new analysis of Reserve Bank data by financial research website MoneyHub.

The analysis reveals that credit card interest rates have actually increased from 18.0% in 2000 to 19.7% in 2025 - despite the Official Cash Rate (OCR) dropping from 6.5% to as low as 0.25% during the same period. Banks passed OCR cuts on to mortgage holders but never to credit card customers.

"This is arguably wealth extraction on a massive scale," said Christopher Walsh, Founder of MoneyHub. "When mortgage rates halved during COVID, credit card rates didn't budge. I appreciate it’s unsecured lending so higher risk, but banks likely earn around a 16% margin on credit cards versus 2-3% on mortgages - it's their most profitable product, and there's no competitive pressure to change."

Key findings from the analysis:

• $6.3 billion in total credit card debt outstanding (November 2025)
• $2.8 billion (51%) is interest-bearing debt accruing at 19.7%
• $7 billion paid in interest from 2015-2025
• $54 billion flows through NZ-issued credit cards annually ($4.6 billion per month)
• Interest rates rose from 18.0% (2000) to 19.7% (2025)
• Overseas credit card spending hit a record $8 billion in 2024, up 27% from pre-COVID

However, the analysis uncovered positive trends: the proportion of credit card balances accruing interest has dropped from 72% in 2000 to 51% in 2025 - a 21 percentage point improvement suggesting more New Zealanders are using credit cards correctly by paying in full each month.

"The debt trap is real - a $5,000 balance at minimum payments takes 41 years to clear and costs $18,570 in interest (at a 2 percent minimum repayment level, an extreme example)," said Walsh. "But Kiwis are getting smarter. Twenty-five years ago, three in four cardholders were paying interest. Today it's just over half. Financial literacy is improving – MoneyHub is doing everything it can with its resources, including a direct-talking guide on credit card debt horror stories going live in the coming days”.

"If you're carrying credit card debt, act now," said Walsh. "Consider a transfer to a 0% balance transfer card and/or dropping the available balance (with a call to the bank) or make a new year’s resolution and cut the card up”.

The full analysis, including historical trends, interest rate comparisons, and regional spending patterns, is available at MoneyHub's guide: Credit Card Debt & Spending Statistics New Zealand 2025

Data Source:

• C12: Credit card balances (month-end and daily average)
• C13: Credit card spending (domestic and overseas billings)
• Data current as at November 2025

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