Debt Alert: 34% of Kiwis Using Credit for Christmas

The Christmas countdown has begun.

For some it is a time of joy, celebration, holidays, and hopefully a bit of sunshine. But new research by Banked has some worrying statistics!

1. Money stress: More than half of women and young people feel a little or very stressed about the cost of Christmas, although stress levels have dropped since last year.
2. Festive spending: A third of Kiwis expect to spend more on Christmas this year.
3. Credit card Christmas: 34% of people will use a credit card as the main way they will pay for Christmas — a 14% increase from 2022.
4. Sustainable gift giving: 66% of Kiwis would pay more for a sustainable gift. Younger generations are almost almost twice as likely to pay more for an eco-friendly gift than Baby Boomers.

We're seeing more and more people ask for loans to cover Christmas spending and that is really worrying. Our CEO, Sasha, says,

Getting in to debt for Christmas means that many families will start 2024 with a debt hangover that lasts much longer than the Christmas weight gain. We do get enquiries for Christmas loans, and our answer has to be no as we're focussed on helping people out of debt, rather than sinking them further in to it.

With 34% of people putting Christmas on a credit card it's worth noting that this could be super costly! In our posts about Black Friday we showed that a $500 purchase on a credit card, paying the minimum could take over 6 years and double the cost to repay!

How can you avoid a debt hangover. Here are some ideas from Team Spotty

1. Create your own gift vouchers. This is grea for parents and kids. A voucher to do the washing up? The garden? Extra TV time?
2. Buy local. Buy sustainably. Kiwis are a creative bunch. Check out local markets and online Buy Local platforms like https://chooice.co.nz/
3. Gift time and experiences over things. How can you create the gift of memories to your whanau? Arranging an outing to the beach can be as nourishing as a spa day, with less of the cost, and more shared joy!

Got some ideas of your own? We'd love to hear from you!!