New Zealand households lean on credit cards as spending power wanes
Kiwibank data shows credit cards made up 71.1% of card transaction value in August, the highest share since the series began in 2002.
According to Kiwibank, credit cards accounted for 71.1% of the value of all card transactions in August, marking a record high since the bank started tracking the metric in 2002. Debit cards fell to 28.9% of the total, a sharp reversal from the 2017 period when credit cards were under half of all spending. Bank economists interpret the move as a sign that households are still feeling the strain of recent inflation and have turned to credit to smooth daily expenses after depleting savings.
While confidence indicators have improved, a still-soft labour market and rising interest rates are curbing broader consumer spending. The rise may also be driven by attractive rewards, travel points and cashback offers. Stats NZ reported a 0.9% drop in overall electronic card spending in August, with only fuel sales showing a modest increase.
Why it matters
Rising reliance on credit cards signals that many New Zealanders are still financially stretched despite improving confidence.
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