Working to Pay
December 9th 2007 07:55
I’m told that New Zealand has one of the highest debt levels in terms of credit cards in the world. That’s pretty scary when you consider that we’re a fairly small country in terms of population – some 4 million of us – and we’re upholding debt of some $4.5 billion. This is an extraordinary amount. I can’t even work out how much each one of us owe, because my calculator doesn’t like to think in billions!
Blame the people using the credit cards, the economists say. Yes, certainly each and every one of us needs to watch carefully what we spend, or else we wind up paying high interest rates for anything we don’t pay off in time. And there’s a certain mentality amongst the younger marrieds that they should have everything now – plus holidays, and good cars, and children. No wonder their debt level is high. Many of them have no idea how to save or spend wisely.
But perhaps a good deal more of the blame should be put on the banks. At present there are 75 different types of credit cards available in New Zealand, some of them charging nearly 20% interest, some of them charging much less. And regularly through the post we’re sent offers for more credit cards. Apparently in the States, according to market research, many people (often the people least able to afford to finance more credit) are sent up to six offers a month for another credit card. High risk households are sent offers just as regularly as people who could afford another card. Don’t the banks have any sense? Or are they just plain greedy?
You can see some people spending the rest of their working lives paying off their debt. It ain't fun!
Blame the people using the credit cards, the economists say. Yes, certainly each and every one of us needs to watch carefully what we spend, or else we wind up paying high interest rates for anything we don’t pay off in time. And there’s a certain mentality amongst the younger marrieds that they should have everything now – plus holidays, and good cars, and children. No wonder their debt level is high. Many of them have no idea how to save or spend wisely.
But perhaps a good deal more of the blame should be put on the banks. At present there are 75 different types of credit cards available in New Zealand, some of them charging nearly 20% interest, some of them charging much less. And regularly through the post we’re sent offers for more credit cards. Apparently in the States, according to market research, many people (often the people least able to afford to finance more credit) are sent up to six offers a month for another credit card. High risk households are sent offers just as regularly as people who could afford another card. Don’t the banks have any sense? Or are they just plain greedy?
You can see some people spending the rest of their working lives paying off their debt. It ain't fun!
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