Cost of living: Number of New Zealanders falling behind on credit card payments grows

More and more people are being trapped by the cost of living, with increasing numbers of us falling behind on credit payments.

The latest figures from Centrix show just how many Kiwis are in arrears, and budgeting advisors are saying demand for their services are high.

In the current financial climate, you don't have to look far for savings tips or tricks.

However, according to Auckland Central Budgeting manager Tim Maurice, some borrowers are still falling into the debt trap.

"Ninety percent of people we see, the issue is debt. Without the debt they would be fine, they would be surviving," Maurice said.

"Those extra payments on the debt is what's getting them into trouble."

The latest figures from credit reporting agency Centrix show more people are finding themselves in trouble with 426,000 behind on credit payments in July, up from 414,000 in June. 

That's 7.5 percent higher year-on-year, although that is compared to the historic lows we saw during the COVID-19 period. 

"The key thing to really think about is it's against seasonal trends," Centrix chief operating officer Monika Lacey said.

"At the moment we would expect to see arrears dropping a little bit in the lead-up to Christmas, so the fact that this month in isolation it's gone higher, is a little bit of an alarm bell.

"But, one month doesn't make a trend so we have to wait and see what happens.

Centrix said it expects arrears to continue to rise, and it's observed a new age group under the age of 25 who are struggling.

"Falling behind in telco first, so if you look at the arrears of a young individual, telco is the first to go," Lacey said.

The figures show personal loan arrears up by 9 percent and car loan arrears up by 6 percent.

Buy now pay later arrears dropped to a five-month low, but they're still trending up. 

Auckland Central Budgeting said demand for its service is up this year and they're booked up, two weeks in advance. 

"The stress this puts on people, you know, not being able to make payments, not being able to sleep at night, stressing and worrying, what's going to happen to their car, what's going to happen to their kids, can they afford to get a school uniform, can they afford to buy food," Maurice explained.

"This all comes around, unfortunately, from that easy-to-get credit."

The message is for people to ask for help from a free financial advisor, like Money Talks, before the debt stacks up.