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Speaker 1: New Zealand has just recorded its highest number of credit

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Speaker 1: card applications since twenty twenty one. Credit card areas are

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Speaker 1: also on the rise, up to four point four percent

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Speaker 1: in August. Financial hardship cases are up a quarter, were

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Speaker 1: almost a quarter a year on year, and twenty nine

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Speaker 1: percent of those cases relate to credit card debt. Tom

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Speaker 1: Hartman is the personal finance lead. It's sorted and is

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Speaker 1: with us this afternoon. Kielder, Tom Koda.

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Speaker 2: Great to be with you, Jack.

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Speaker 1: What do you put this down to?

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Speaker 2: Well, I think we're headed like cost of living is

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Speaker 2: still is still binding. These are still really tough times,

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Speaker 2: and now that we're heading towards what it's called the

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Speaker 2: Bermuda triangle of family finance, which is Christmas, the holiday,

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Speaker 2: and then back to school, and so we're seeing all

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Speaker 2: these costs coming at us at the moment. One way

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Speaker 2: to cope with them is to borrow our way through

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Speaker 2: it on credit cards.

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Speaker 1: Yeah, why is it so bad right now? The cost

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Speaker 1: of living has been an issue for some time.

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Speaker 2: Now.

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Speaker 1: What do you think it is about this time in

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Speaker 1: particular that is leading to such a surge in credit cards.

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Speaker 2: Well, if you look at hardship, what that centric report

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Speaker 2: is telling us is that it's really more than ever

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Speaker 2: difficult for people to get by these days. And there

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Speaker 2: are a couple lot of bills that have maybe maybe

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Speaker 2: piled up from power from kids, sports season, could be

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Speaker 2: it could be many different situations and you know, this

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Speaker 2: is just one way to get through it.

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Speaker 1: Yeah, it's interesting to break down the numbers. The age

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Speaker 1: group experiencing the highest levels of financial hardship at the

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Speaker 1: moment are those in their late twenties, mid to late twenties,

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Speaker 1: so thirty five to thirty nine. Why do you reckon

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Speaker 1: that is?

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Speaker 2: Yeah, and I'm wondering if this is you know, because

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Speaker 2: they're young families and you know, costs from you know,

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Speaker 2: getting through these times, you know in terms of everyday bills,

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Speaker 2: but also school school fees, holidays coming up. I think

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Speaker 2: people are also preparing. But you know, credit cards they're

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Speaker 2: still really incredibly an expensive way to do this, and

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Speaker 2: there's such a variation in how much they cost us.

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Speaker 2: This is expensive money.

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Speaker 1: Yeah, I mean, do people have the financial literacy to

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Speaker 1: know how to navigate credit card date?

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Speaker 2: This is an extremely sticky product too in terms of

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Speaker 2: a way of borrowing, so you get your credit limit

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Speaker 2: and you know, our minds go to, oh, this is

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Speaker 2: how much money I have to work with, but it's

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Speaker 2: really only your credit limit is the amount that you

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Speaker 2: can borrow, and when you're borrowing, it can be incredibly expensive.

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Speaker 2: One of the cheapest ones is thirteen point nine percent,

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Speaker 2: but they can go up as high as double that

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Speaker 2: twenty seven point nine to nine. This is this is

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Speaker 2: really an expensive way to do this.

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Speaker 1: Are there alternative options for people?

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Speaker 2: Well, I really hope that people are aware that there

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Speaker 2: are no interest and low interest loans out there that

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Speaker 2: can really, you know, be a good alternative. They're not

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Speaker 2: for everyone, but they're available from groups like Good Shepherd,

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Speaker 2: Non Tanga to Finance. You know, they're really set up

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Speaker 2: to help people borrow in a much safer way.

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Speaker 1: Yeah. And for the time being, looking at these latest numbers,

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Speaker 1: what do you think it means for our financial future?

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Speaker 1: What will high levels of credit card use and potentially

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Speaker 1: credit card date mean for New Zealand's economic recovery?

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Speaker 2: Well, I think in general we're going to get stuck

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Speaker 2: with the bill. We'll be carrying you know, balances for

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Speaker 2: a while, paying it down slowly, and you know, these

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Speaker 2: balances are going to stick with us for a while,

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Speaker 2: and basically we're going to be paying that interest over

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Speaker 2: a long periods to come.

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Speaker 1: Thanks for your time, Tom, I appreciate it.

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