Is your money in intensive care?

Are your finances in intensive care? Photo / iStock

Around 735,000 Kiwis are thought to be in "intensive care" when it comes to their finances, according to the Commission for Financial Capability.

But how do you really know if your money is in trouble?

The commission has come up with six quick questions to help people work out if their money is in intensive care, on the ward or just in need of GP visits.

Rob Collins, general manager Credit Union Auckland, sees a lot of people in financial trouble when they come knocking at his door to get a debt consolidation loan - a loan where people can roll all of their loans into one.

The credit union has seen a 50 per cent rise in the number of people applying for those loans in the last two years.

Collins said most were aged between 25 and 40 and 90 per cent did not own a home.

While the average debt consolidation was around $19,000 some had as much as $50,000 to $60,000 in consumer debt.

"We had one couple who between them had 13 cards with a combined limit of a quarter of a million dollars."

He believes one of the biggest drivers of consumer debt has been the long periods of interest free terms being offered by retailers.

"We know that people don't pay it off even though it's over a long time period."

It's when they get to the end of interest free period and are stung by the 24.99 per cent interest rate that their ability to afford the purchase comes into question.

Collins said his message to consumers was: "Think before you buy."