KEY POINTS:
Credit card limits, which banks were until recently encouraging their customers to expand, have now taken a u-turn.
Banks cut credit limits for their personal and business credit card customers by a record NZ$1.635 billion, or 8.5 per cent, to NZ$17.6 billion in August, Reserve Bank data shows.
Banks are being more careful with credit limits and credit criteria in recent months as international funding costs rise and as the availability of credit on wholesale markets become tougher.
Credit lending criteria for mortgages for 'low doc' lending have tightened in recent weeks as the 'credit crunch' bites.
This means the collective credit limit on cards has slumped lower than it was a year ago. The previous biggest one month fall was in August 2001, when the credit limit dropped NZ$1.159 billion to NZ$11.428 billion. (Exclusive to email)
- INTEREST.CO.NZ
