Xmas credit card debt about to bite

Category: Credit Card Debt Published: Saturday, 16 January 2016 Written by Super User

Budget advisers are bracing for droves of people struggling with credit card debt after a big December spend in Otago and Southland.

Paymark data for December revealed Southern shoppers put $199.4 million on credit cards in December, a 14.2% increase in Otago and a 14% rise in Southland compared with December 2014.

The regional increases were the two biggest in New Zealand.

Anglican Family Care director Nicola Taylor said people stopped visiting budget advisers at the Dunedin social services agency between mid-December and late January.

Because they are away spending, and in late January and early February they will come in their droves and they want us to work miracles.

The sharp increase in credit card spending was expected because most of the people seeking budgeting advice owned several maxed-out credit cards and store cards.

The Christmas marketing campaigns by companies from the start of November was irresponsible.

The disgusting campaigns of smiling parents and children surrounded by consumer goods prompted many people to make impulse purchases.

The advertisements exacerbated vulnerabilities and often made Christmas an unhappy and stressful time for many Dunedin families.

Dunedin Budget Advisory Service assistant manager Andrew Henderson said he was ''surprised to see the steep increase in credit card use in Otago and Southland.

He had hoped fewer people would be using credit cards after changes to the Credit Contracts and Consumer Finance Act last year.

Acode of responsible lending ... puts more onus on the credit providers to make checks so they are not putting people into hardship by providing credit.

The budget service was usually quiet in December and January but busy in February.

Many people seeking advice had blown their budgets with Christmas and holiday spending and by getting their children prepared for another school year.

Debt on credit card and store cards featured heavily among those seeking advice, many paying interest rates of up to 28%.

People should make a purchase using a credit card only if they were confident they could pay the full balance every month, to avoid hefty interest payments.

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