Personal debt bill shrinking

Last updated 10:44 01/08/2010

IMPROVEMENT: Kiwis are starting to get their personal debt under control.

Opinion poll

Are your personal debts shrinking?

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Kiwis are slowly getting themselves out of debt.

New figures show New Zealanders' personal debt has fallen, reversing the trend of the nineties and noughties, when debt peaked at $12.7 billion in December 2008.

Reserve Bank statistics released last week show consumer lending - credit cards, hire purchase, car loans and personal loans - fell from $11.9b in May to $11.8b in June.

One commentator said the drop showed Kiwis' tolerance for debt had reached an end, as workers fear losing their jobs and being unable to make payments, and consumers maxing out personal debt.

Money guide sorted.org.nz manager David Kneebone said: "People have got used to having more than one credit card, buying items on hire purchase and borrowing to buy. That is fine if you can afford it, but it can cause problems if paying off the debt becomes difficult."

If you answer yes to three or more of the following questions, chances are you need to get your spending under control.

Is your credit card maxed- out, or close to it, and you're making only the minimum payments?

Are you having difficulty paying all your bills at least once every three months?

Do you have no idea how much your regular bills are every month?

Do you have no idea how much spending money you have every month?

If you lost your job, would you be in financial trouble within a month?

– Esther Harward

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