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Tom Hartmann: Sorted Personal Finance Lead on the increase on Kiwis applying for credit cards · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks'd be follow
• 0:12
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  Speaker 2: New Zealands has just recorded its highest number of credit
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  Speaker 2: card applications since twenty twenty one. Credit card areas are
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  Speaker 2: also on the rise, up to four point four percent
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  Speaker 2: in August. Financial hardship cases are up a quarter for
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  Speaker 2: almost a quarter year on year, and twenty nine percent
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  Speaker 2: of those cases relate to credit card debt. Tom Hartman
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  Speaker 2: is the personal finance lead. It's sorted and is with
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  Speaker 2: us this afternoon, Kyoder.
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  Speaker 3: Tom Koda. Great to be with you, Jack.
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  Speaker 2: What do you put this down to?
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  Speaker 3: Well, I think we're headed like cost of living is
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  Speaker 3: still is still binding. These are still really tough times,
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  Speaker 3: and then we're heading towards what i's to call the
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  Speaker 3: Bermuda triangle of family finance, which is Christmas, the holiday,
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  Speaker 3: and then back to school, and so we're seeing all
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  Speaker 3: these costs coming at us at the moment. One whay
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  Speaker 3: to cope with them is to borrow our way through
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  Speaker 3: it on credit cards.
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  Speaker 2: Yeah, why is it so bad right now? The cost
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  Speaker 2: of living has been an issue for some time now,
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  Speaker 2: what do you think it is about? This time in particular,
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  Speaker 2: that is leading to such a surge in credit cards.
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  Speaker 3: Well, if you look at hardship, what that centric report
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  Speaker 3: is telling us is that it's really more than ever
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  Speaker 3: difficult for people to get by these days. And there
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  Speaker 3: are a couple lot of bills that have maybe maybe
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  Speaker 3: piled up from power, from kids sports season. It could
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  Speaker 3: be many different situations and this is just one way
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  Speaker 3: to get through it.
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  Speaker 2: Yeah, it's interesting to break down the numbers. The age
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  Speaker 2: group experiencing the highest levels of financial hardship at the
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  Speaker 2: moment are those in their late twenties, mid to late twenties,
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  Speaker 2: so thirty five to thirty nine. Why do you reckon
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  Speaker 2: that is?
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  Speaker 3: Yeah, and I'm wondering if this is you know, because
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  Speaker 3: they're young families and you know, costs from you know,
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  Speaker 3: getting through these times, you know in terms of everyday
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  Speaker 3: bills but also school school fees, holidays coming up. I
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  Speaker 3: think people are also preparing, but you know, credit cards
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  Speaker 3: there's still really incredibly an expensive way to do this,
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  Speaker 3: and there's such a variation and how much they cost us.
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  Speaker 3: This is expensive money.
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  Speaker 2: Yeah, I mean, do people have the financial literacy to
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  Speaker 2: know how to navigate credit card date?
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  Speaker 3: This is an extremely sticky product too in terms of
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  Speaker 3: a way of borrowing. So you get your credit limit
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  Speaker 3: and you know, our minds go to, oh, this is
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  Speaker 3: how much money I have to work with it, But
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  Speaker 3: it's really only your credit limit is the amount that
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  Speaker 3: you can borrow, and when you're borrowing, it can be
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  Speaker 3: incredibly expensive. One of the cheapest ones is thirteen points
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  Speaker 3: nine percent, but they can go up as high as
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  Speaker 3: double that twenty seven point nine to nine. This is
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  Speaker 3: this is really an expensive way to do this.
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  Speaker 2: Are there alternative options for people?
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  Speaker 3: Well, I really hope that people are aware that there
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  Speaker 3: are no interest and low interest loans out there that
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  Speaker 3: can really, you know, be be a good alternative. They're
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  Speaker 3: not for everyone, but they're available from groups like Good
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  Speaker 3: Good Shepherd, don Tanga to Finance. You know, they're really
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  Speaker 3: set up to help people borrow in a much safer way.
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  Speaker 2: Yeah, And for the time being, looking at these latest numbers,
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  Speaker 2: what do you think it means for our financial future?
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  Speaker 2: What will high levels of credit card use and potentially
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  Speaker 2: credit card date mean for New Zealand's economic recovery?
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  Speaker 3: Well, I think in general we're going to get stuck
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  Speaker 3: with the bill. We'll be carrying, you know, balances for
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  Speaker 3: a while, paying it down slowly, and you know, these
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  Speaker 3: balances are going to stick with us for a while,
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  Speaker 3: and basically we're going to be paying that interest over
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  Speaker 3: our long periods to come.
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  Speaker 2: Thanks for your time, Tom, I appreciate it.
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