Waikato retailers could have themselves a merry little Christmas despite the economic crunch, as credit and hire purchase applications make a comeback and shoppers are forecast to throw off their financial straitjackets in a bit of a splurge.

Credit data analysis specialist Veda New Zealand said applications for credit are 9 per cent up on September last year as falling mortgage interest rates and under-control credit cards embolden Kiwis to loosen last year's tight grip on wallets.

Managing director John Roberts said applications for hire purchase and credit cards are "making a comeback for the first time in 12 months".

"People have got through the global financial crisis and are managing their finances better. Home loans are coming off fixed-term programmes and moving into floating rates with people saving themselves 1.5 percentage points, which is quite a bit in terms of saved interest.

"Reserve Bank figures show people have de-leveraged payments on their credit cards over the year and we wonder if they might be ready to spend a bit."

Kiwis spent just over $4.6 billion in December last year, according to Paymark which processes 75 per cent of all electronic transactions.

The Retailers Association also reckons cash registers could be ringing out this Christmas - but a bit depends on the weather.

Northern regional manager Russell Sinclair said Kiwis were getting to the end of a long period of retiring and restructuring debt.

"People might now be more prepared to spend, feeling they've organised themselves. Given a bit of encouragement and good weather in the lead-up to Christmas, I think people will get back into the mood of shopping."

Mr Sinclair said the weather and associated "feel good factor" had an influence on spending, and this winter had been a big dampener.

But a new consumer spending survey by debt collection and credit checking company Dun & Bradstreet paints a very different picture for Christmas spending.

Its latest expectations survey found two-thirds of respondents were less likely to spend on non-essentials in the December quarter compared to the same time last year.

The survey revealed 54 per cent of Kiwis were worried about their current financial situation, 5 per cent up, quarter-on-quarter.

Expectations for Christmas period spending were low, with 68 per cent of New Zealanders less likely to spend on non-essentials and only 5 per cent were more likely to buy items such as entertainment or beauty treatments.

Additionally, 63 per cent intended to avoid making big purchases, like a car or holiday, in the December quarter.

The survey found only 4 per cent intended to apply for a new credit card, compared with 6 per cent in the September quarter.

Dun & Bradstreet New Zealand general manager John Scott said more than half of those surveyed did not plan to increase their credit limit, down 7 per centage points quarter-on-quarter and down 25 percentage points year-on-year.

- © Fairfax NZ News

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