Kiwis struggling to meet credit payments

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Almost one third of Kiwis say they are expecting difficulties meeting credit obligations in the next three months, with Christchurch residents under some of the biggest financial strain.

The findings are taken from the latest Dun & Bradstreet Consumer Credit Expectations Survey, which canvassed 1010 people on their expectations for credit usage, history and spending during the September quarter.

Forty-six per cent of Christchurch respondents said they would delay making a major purchase in the next three months, against the national average of 27 per cent.

Dun & Bradstreet general manager John Scott said the earthquakes coupled with uncertain economic conditions had severely curbed people's appetite for credit, and placed a strain on consumers in meeting their credit obligations.

Not surprisingly low income earners and the unemployed also demonstrated the highest level of financial stress and were more likely to have difficulties paying off their credit cards.

"Overall the survey reveals the cautious spending habits of Kiwis in the post-Global Financial Crisis, with the overwhelming majority (77 per cent) likely to fund a purchase from their own savings.

Respondents also cited the potential rise in interest rates to negatively impact their income, with more than half of those on salaries exceeding $100,000 expecting to be the hardest hit.

Other findings include:

*17 per cent of people expect higher household debt levels, down two per cent from the June 2011 quarter.

*Only five per cent of respondents intend to apply for a new credit card in the next three months, a stark contrast from 27 per cent in the June quarter of 2011.

*29 per cent of people expect to encounter difficulties in meeting their credit commitments.

*40 per cent of people anticipate that a rise in interest rates will have a negative impact on their finances.

*27 per cent expect to hold off making a major purchase in September quarter 2011, up five per cent since the June quarter expectations.

*32 per cent of people expect to use a credit card for otherwise unaffordable expenses.

- NZ HERALD ONLINE