Baby boomers, Generation Y back on the plastic fantastic

Baby boomers and Generation Y have resumed their spending sprees with demand for credit cards and mortgages on the rise after two years of falling demand, according to credit bureau Veda.

Customer credit card inquiries were up about 11 per cent in 2011 compared with a year earlier, with baby boomer inquiries showing a sharp rise of some 24 per cent.

Mortgage inquiries rose about 13 per cent from 2010, with Gen Y leading the generational breakdown, up 25 per cent.

"Consumers are getting their confidence back when it comes to seeking credit again to support their purchasing," said John Roberts, managing director of Veda.

Reserve Bank data this week showed that total credit card billings rose an annual 5.9 per cent to a seasonally adjusted $3.08 billion last year.

The number of consumers defaulting on bills and loan repayments fell by about 18 per cent last year when compared to 2010.

Roberts said the commercial sector remained 18 months behind consumers, with New Zealand businesses set to face a 60-day delay when waiting to be paid for goods and services.

"The trouble for businesses is that slow payers have the ability to slow down their businesses - it becomes a nasty downward spiral."