Dave Gee: Life from Right Field

A survey released this week found over a quarter of New Zealanders are planning to use their credit cards to pay some of their upcoming bills.

The "Consumer credit expectations" online survey conducted by Dun and Bradstreet found that 28% of respondents intended to use credit to pay bills they can't afford over the next quarter.

20% of those surveyed are also planning to apply for some form of credit over the next few months, with 7% looking to increase the limit on their credit card/s. Younger people seem to be be easily attracted to easy credit, with over a third happy to use credit for things they couldn't afford.

Unfortunately good financial literacy isn't taught at most schools, which probably explains the startling 55% of those aged 18-34 say they're couldn't afford to live on savings for even one month if they lost their jobs.

However the survey did also find that debit cards are now in higher demand than credit cards. It also revealed that the majority of people planning to make a major purchase in the next few months are intending to fund it through existing savings.

Credit cards are very handy things, provided you're disciplined when using them. I put as many of my bills and purchases as possible on my credit card, both for convenience and to increase the balance of my Air NZ Airpoints account.

These benefits also include taking advantage of the credit card's interest free period, provided you pay off the balance in full. Banks would obviously prefer you didn't do this, as failing to pay your full balance kicks in those hefty interest charges of around 20%.

If you are using your credit card as a rolling credit facility with a permanent balance, you should look for one of the low interest/no fees cards banks are now offering. Otherwise you should look for the bank and card offering the best rewards programme or package that suits you.

This Australian site reviews and compares the different credit card deals and programmes on offer in Australia. Here in New Zealand, a good place to start is Consumer magazine, which regularly monitors credit cards and reward programmes.

Gold (and Platinum) cards are often a good choice for frequent travellers. They do have higher annual fees, but usually offer free travel insurance which makes up for the difference in cost. Many also offer reward points linked to airline frequent flyer programmes, based on your monthly spend.

* NZ Herald: Savings would last month for many