Consumers eschew plastic for personal loans and hire purchase

Friday 29th January 2010

Applications for hire purchase and personal loans climbed last month, while credit cards declined, suggesting consumers are leaning toward more conservative borrowing in the wake of the recession, says Veda Advantage.

Applications for hire purchase rose 28% in December from the same month of 2008 and home loan applications surged 119%, according to New Zealand’s biggest credit checking company. The number of people applying for credit cards fell 26% in the same period.

“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,” said John Roberts, Veda’s managing director. “People don’t want to see their personal debt spiraling out of control.”

Mortgage applications rose about 29% last year compared with 2008. Veda, which holds files on about 98% of New Zealanders with a credit record, said consumer defaults rose about 9% last year while commercial defaults climbed 38%.

Businesswire.co.nz

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