16 Oct 2008

Credit applications hit four-year low

10:19 pm on 16 October 2008

The number of applications for credit to buy goods is at its lowest level in four years. Total credit applications fell 10.5% in the year to September.

Credit reporting agency, Veda Advantage, says total credit applications fell 10.5% in the year to September, compared to the previous period.

While mortgage and hire purchase applications dropped heavily, conversely the number of people taking out credit cards rose more than 10%.

New Zealand director John Roberts attributed the overall fall in credit applications to an increased wariness by people to saddle themselves with more debt.

He says the apparently contradictory rise of credit card use is more a reflection of their ability to stave off debt. The loss of appetite for credit is also mirrored by a sharp rise in consumers defaulting on loans.