September 30, 2024 • 8 mins
The number of credit card applications has reached its highest level since 2021, leading to fears people are seeking credit as the high cost of living bites.
David Cameron, manager of the Wellington Budget Service says credit cards can be dangerous for consumers who are lured in with the promise of an interest-free period, but then use them for daily purchases.
He joined Nick Mills to discuss the issue.
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Episode Transcript
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Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talks.
Speaker 2 (00:11):
He'd be joining us now is the manager of Warrington
Budget Service, David Cameron. Good morning, Good morning.
Speaker 3 (00:20):
David, good morning. Next, how are you good?
Speaker 2 (00:23):
Thank you great to have you back on the show.
Let's talk credit cards. I don't know whether you've heard
but record or not records, but the most amount of
people applying for credit cards since twenty twenty one, and
double the amount of people taking money out of ki
we Saver this year to last year. Does that concern you?
Speaker 3 (00:42):
It concerns me. Yes, it does. But it doesn't surprise
me Nick, because that's exactly what we are seeing at
the Budget Service QI Saver withdraws, particularly, a lot of
people are applying for q SA house with draws and
also constantly being asked should we get a credit card?
Of constantly asked what's the advantage in having a credit card?
Speaker 2 (01:01):
What do you say to those people that want to
get a credit card?
Speaker 3 (01:06):
I tell them that credit cars are useful in some respects. However,
they must they must pay off the balance and full
every month because the interest rates charged and credit cards
buy and large are quite prohibitive.
Speaker 2 (01:21):
What are the what are the real interest rights of
a credit card? Do you know?
Speaker 3 (01:26):
Yes? Well, gener around about twenty Some of them we're
allowed to mention names like Gem type cards, they are
excess of twenty percent. Some of the low interest ones
are like thirteen or fourteen percent, but buying large they're
around about twenty.
Speaker 2 (01:43):
So what would you do if you went to your
bank and said I needed to borrow some money I
just needed for six months, and I came back to
you and said that you want they wanted twenty percent
interest on that money. You would look at them and
think that they were the Russian mafia, wouldn't you?
Speaker 3 (01:54):
Of course you would, of course you would. And that's
why we emphasize the clients that really, if you, if
you can't pay off and fool every month, then they're
not It's not for you. However, in many ways credit
cards will be I'm quite insiduous in our society that
for people buy generally white goods, they're offered interest free.
It usually comes with a gem card. It's called a
(02:18):
gem card, which is the kind of credit card, and
it's basically interest free while they buy the white goods,
and then they carry on after the item using it
as a credit card, and that's when the interestrate ramp up.
And that's journally when they come and see us, tell.
Speaker 2 (02:34):
Me, what are the what are the numbers that are
coming to your service? Like lately are they are they
even out? Have they got better?
Speaker 3 (02:41):
Hey? Our budget service has never been busier. To the
end of August there we were. We're fifty percent up
on referrals. So at the same time last year to
the end of August.
Speaker 2 (02:53):
Wow, what about David? What about paying now and by later?
Like after paying what you know? How's how's that hanging
you affected? How how many people are coming to see
you with issues to do with buying airpiehliner?
Speaker 3 (03:08):
It's very popular by now pay later. And as we know,
when you go to most retail stores now there's a
user sticker in the door where the US is of
a visa sticker. Now there's usually an after pay tex sticker.
Poy go over the reasons they, you know, are the
negatives and having a buy now, pay latter to to
(03:30):
our clients such things as it encourages intulse spending. The
very fact that you can walk out the shop after
only paying twenty five percent of the cost of the goods,
there's late payment fees, and also it's being recognized that
quite often when people get the item home, they don't
really want it. It's just that they were I feel
like there were hypnotized, if you like, by only having
(03:53):
to pay twenty five percent of it. So therefore the
reluctance to buy, he wasn't wasn't there, which I guess
is the whole idea of buy now pay lator.
Speaker 2 (04:02):
Well, it's buy remosse, isn't it. We always get buy remosse.
We buy every time I buy? Can I get buyer?
And more so I look at it and go, why
did I do that? Why did I do that? You know?
Speaker 3 (04:10):
Really? Yes, and you're expecting to pay for twenty thousand
for the car, and they said you can walk out
with the shop with it five grand. Now then you're
going to do it. Yeah, you're going to do it.
Speaker 2 (04:25):
David, how do you answer one about Texas just called
and try and rent, to try and rent a car
without a credit card? What do you say to that?
Which it is, I mean, how do you do that?
Speaker 3 (04:36):
Yes? Indeed, in fact that that is probably the advantages
of having a card. You know, there's things like it's easy, too,
easier to do things that rent a card, easier to
book things online. And if you play it properly, if
you play it properly, you get interest free days.
Speaker 2 (04:53):
Right. So, David, I mean, let's talk about your business
just for a second. I don't want to go off topic.
But last time that we spoke to you, you're in
the studio with me and you were getting funding taken
away from you by with the new government. How is
you hell? How's your organization sort of getting through those
horrific times?
Speaker 3 (05:11):
Yes, and thanks for asking Nick the fact that we're
a voluntary organization where were affected a lot less perhaps,
and they then other organized and other budget organizations. And
we have quite a lot of money in reserve and
we'll carry it on without skipping a beat. But we're
doing okay. We have money, as I say, in reserve
(05:32):
which will tie the tied us over until we can
get to some other funding.
Speaker 2 (05:37):
So go back to the credit cards, and everyone now
applying for a credit card, give give us your two
or three nine points on getting a credit card.
Speaker 3 (05:48):
The pluses would be, of course, is the caller said,
it's easy to rent things like cars and book a
book thing buy and book things online. I mean into
three days. As we know, the credit card comes in,
you've got a couple of weeks to pay it, and
generally they come in monthly, so if you play, if
you play correctly, you can get up to probably six
(06:10):
weeks eight interest free what's in the currency, of course,
and perversely it can help the build up your credit rating.
Side by, the downside of course is the high interest rates.
Very they're very very high interest rates, and of course
it's easy to overspend. You've got to limit on your
(06:31):
card and you think, I'll just spend this, but of
course we can lead to potential credit damage when you
when you overspend and they you don't pay off in
trool every month. One of the other downsides nowadays as
well know of course, is that when you go into
cafes and others, there's a percentage surcharge on it. Now,
So the the ease of using a credit card when
(06:51):
you go for the cats and restaurants has has they
been diminished by the fact that they usually add on
two percent or one and a half percent surcharge. Yeah.
Speaker 2 (07:00):
I went to a reasonably large family do on Father's
die actually, and I saw the bill. You know, a
couple of eyes later on someone's desk and it was
like sixteen dollars or fifteen dollars there was a search
arge on it. Oh, holy hell, that's a lot of money.
Speaker 3 (07:16):
Yeah, because we just tap and go. In many ways,
the bank's lulled us into the tap and go as
to everybody's benefit, it was so fast and easy and
cook to do. And then once we're all into the
way of using it, they started adding a surcharge a
such charge to the tap and go, and of course
it is a credit card to stop there's a surcharge.
Speaker 2 (07:37):
Wow, David.
Speaker 3 (07:38):
The main thing really is that the very high Interestry said.
Of course they usually have annual fees as well. Annual
fees can range from it for fifty to two hundred
dollars for a credit card. Hidden costs.
Speaker 2 (07:50):
Now you hype those when you get those fees, I go,
nothing on your bill to pay, but you've got fifty
dollars to pay for the next one.
Speaker 3 (07:56):
Yeah.
Speaker 2 (07:57):
Thank you, David, lovely to talk to you. Appreciate it.
Keep up the good work, keep on helping people in
mind and David Cameron and Warrington Budget Service there to
give us some information on credit cards.
Speaker 1 (08:10):
For more from Wellington Mornings with Nick Mills, listen live
to news talks It'd Be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talks.
Speaker 2 (00:11):
He'd be joining us now is the manager of Warrington
Budget Service, David Cameron. Good morning, Good morning.
Speaker 3 (00:20):
David, good morning. Next, how are you good?
Speaker 2 (00:23):
Thank you great to have you back on the show.
Let's talk credit cards. I don't know whether you've heard
but record or not records, but the most amount of
people applying for credit cards since twenty twenty one, and
double the amount of people taking money out of ki
we Saver this year to last year. Does that concern you?
Speaker 3 (00:42):
It concerns me. Yes, it does. But it doesn't surprise
me Nick, because that's exactly what we are seeing at
the Budget Service QI Saver withdraws, particularly, a lot of
people are applying for q SA house with draws and
also constantly being asked should we get a credit card?
Of constantly asked what's the advantage in having a credit card?
Speaker 2 (01:01):
What do you say to those people that want to
get a credit card?
Speaker 3 (01:06):
I tell them that credit cars are useful in some respects. However,
they must they must pay off the balance and full
every month because the interest rates charged and credit cards
buy and large are quite prohibitive.
Speaker 2 (01:21):
What are the what are the real interest rights of
a credit card? Do you know?
Speaker 3 (01:26):
Yes? Well, gener around about twenty Some of them we're
allowed to mention names like Gem type cards, they are
excess of twenty percent. Some of the low interest ones
are like thirteen or fourteen percent, but buying large they're
around about twenty.
Speaker 2 (01:43):
So what would you do if you went to your
bank and said I needed to borrow some money I
just needed for six months, and I came back to
you and said that you want they wanted twenty percent
interest on that money. You would look at them and
think that they were the Russian mafia, wouldn't you?
Speaker 3 (01:54):
Of course you would, of course you would. And that's
why we emphasize the clients that really, if you, if
you can't pay off and fool every month, then they're
not It's not for you. However, in many ways credit
cards will be I'm quite insiduous in our society that
for people buy generally white goods, they're offered interest free.
It usually comes with a gem card. It's called a
(02:18):
gem card, which is the kind of credit card, and
it's basically interest free while they buy the white goods,
and then they carry on after the item using it
as a credit card, and that's when the interestrate ramp up.
And that's journally when they come and see us, tell.
Speaker 2 (02:34):
Me, what are the what are the numbers that are
coming to your service? Like lately are they are they
even out? Have they got better?
Speaker 3 (02:41):
Hey? Our budget service has never been busier. To the
end of August there we were. We're fifty percent up
on referrals. So at the same time last year to
the end of August.
Speaker 2 (02:53):
Wow, what about David? What about paying now and by later?
Like after paying what you know? How's how's that hanging
you affected? How how many people are coming to see
you with issues to do with buying airpiehliner?
Speaker 3 (03:08):
It's very popular by now pay later. And as we know,
when you go to most retail stores now there's a
user sticker in the door where the US is of
a visa sticker. Now there's usually an after pay tex sticker.
Poy go over the reasons they, you know, are the
negatives and having a buy now, pay latter to to
(03:30):
our clients such things as it encourages intulse spending. The
very fact that you can walk out the shop after
only paying twenty five percent of the cost of the goods,
there's late payment fees, and also it's being recognized that
quite often when people get the item home, they don't
really want it. It's just that they were I feel
like there were hypnotized, if you like, by only having
(03:53):
to pay twenty five percent of it. So therefore the
reluctance to buy, he wasn't wasn't there, which I guess
is the whole idea of buy now pay lator.
Speaker 2 (04:02):
Well, it's buy remosse, isn't it. We always get buy remosse.
We buy every time I buy? Can I get buyer?
And more so I look at it and go, why
did I do that? Why did I do that? You know?
Speaker 3 (04:10):
Really? Yes, and you're expecting to pay for twenty thousand
for the car, and they said you can walk out
with the shop with it five grand. Now then you're
going to do it. Yeah, you're going to do it.
Speaker 2 (04:25):
David, how do you answer one about Texas just called
and try and rent, to try and rent a car
without a credit card? What do you say to that?
Which it is, I mean, how do you do that?
Speaker 3 (04:36):
Yes? Indeed, in fact that that is probably the advantages
of having a card. You know, there's things like it's easy, too,
easier to do things that rent a card, easier to
book things online. And if you play it properly, if
you play it properly, you get interest free days.
Speaker 2 (04:53):
Right. So, David, I mean, let's talk about your business
just for a second. I don't want to go off topic.
But last time that we spoke to you, you're in
the studio with me and you were getting funding taken
away from you by with the new government. How is
you hell? How's your organization sort of getting through those
horrific times?
Speaker 3 (05:11):
Yes, and thanks for asking Nick the fact that we're
a voluntary organization where were affected a lot less perhaps,
and they then other organized and other budget organizations. And
we have quite a lot of money in reserve and
we'll carry it on without skipping a beat. But we're
doing okay. We have money, as I say, in reserve
(05:32):
which will tie the tied us over until we can
get to some other funding.
Speaker 2 (05:37):
So go back to the credit cards, and everyone now
applying for a credit card, give give us your two
or three nine points on getting a credit card.
Speaker 3 (05:48):
The pluses would be, of course, is the caller said,
it's easy to rent things like cars and book a
book thing buy and book things online. I mean into
three days. As we know, the credit card comes in,
you've got a couple of weeks to pay it, and
generally they come in monthly, so if you play, if
you play correctly, you can get up to probably six
(06:10):
weeks eight interest free what's in the currency, of course,
and perversely it can help the build up your credit rating.
Side by, the downside of course is the high interest rates.
Very they're very very high interest rates, and of course
it's easy to overspend. You've got to limit on your
(06:31):
card and you think, I'll just spend this, but of
course we can lead to potential credit damage when you
when you overspend and they you don't pay off in
trool every month. One of the other downsides nowadays as
well know of course, is that when you go into
cafes and others, there's a percentage surcharge on it. Now,
So the the ease of using a credit card when
(06:51):
you go for the cats and restaurants has has they
been diminished by the fact that they usually add on
two percent or one and a half percent surcharge. Yeah.
Speaker 2 (07:00):
I went to a reasonably large family do on Father's
die actually, and I saw the bill. You know, a
couple of eyes later on someone's desk and it was
like sixteen dollars or fifteen dollars there was a search
arge on it. Oh, holy hell, that's a lot of money.
Speaker 3 (07:16):
Yeah, because we just tap and go. In many ways,
the bank's lulled us into the tap and go as
to everybody's benefit, it was so fast and easy and
cook to do. And then once we're all into the
way of using it, they started adding a surcharge a
such charge to the tap and go, and of course
it is a credit card to stop there's a surcharge.
Speaker 2 (07:37):
Wow, David.
Speaker 3 (07:38):
The main thing really is that the very high Interestry said.
Of course they usually have annual fees as well. Annual
fees can range from it for fifty to two hundred
dollars for a credit card. Hidden costs.
Speaker 2 (07:50):
Now you hype those when you get those fees, I go,
nothing on your bill to pay, but you've got fifty
dollars to pay for the next one.
Speaker 3 (07:56):
Yeah.
Speaker 2 (07:57):
Thank you, David, lovely to talk to you. Appreciate it.
Keep up the good work, keep on helping people in
mind and David Cameron and Warrington Budget Service there to
give us some information on credit cards.
Speaker 1 (08:10):
For more from Wellington Mornings with Nick Mills, listen live
to news talks It'd Be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio
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