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Borrowing Methods Changing, According To Credit Company

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Jan 29 NZPA - New Zealanders are choosing to purchase goods and services by way of hire purchase or personal loan rather than a credit card, according to the latest data from credit company Veda Advantage.

There was 27.75 percent increase in those applying for hire purchase in December 2009 over December 2008 and a 119 percent increase in those applying for a personal loan over the same period.

This contrasts with a 26.01 percent fall in the numbers of people applying for a credit card in December 2009 compared with December 2008.

Veda Advantage managing director John Roberts said people adopted a more conservative approach to their financial affairs during the economic downturn.

"People still want and need to borrow money but many now want a formal regime of repayment and they want to know when they have paid off their debt - people don't want to see their personal debt spiralling out of control."

Credit cards have been in the news this year after an agreement between the Commerce Commission and Visa and Mastercard paved the way for retailers to pass on credit card charges if they wanted to.

Veda Advantage said the tough economic times were still showing up in default statistics.

The number of commercial defaults increased by 38.46 percent in 2009 compared with 2008, while consumer defaults were up 8.86 percent.

Property investment still seems to be popular. Applications for mortgages rose 28.93 percent in 2009 over 2008.

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