New Zealanders have paid roughly $7 billion in credit card interest over the past decade, an average of $557 million annually flowing directly to banks.
According to analysis by MoneyHub, Credit card rates have risen from 18.0% in 2000 to 19.7% in 2025, despite the Official Cash Rate (OCR) dropping from 6.5% to as low as 0.25%.
“This is arguably wealth extraction on a massive scale,” said Christopher Walsh, Founder of MoneyHub.“When mortgage rates halved during COVID, credit card rates didn’t budge. I appreciate it’s unsecured lending so higher risk, but banks likely earn around a 16% margin on credit cards versus 2-3% on mortgages – it’s their most profitable product, and there’s no competitive pressure to change.”
Total credit card debt stood at $6.3 billion as of November 2025, with $2.8 billion accruing interest at 19.7%. Overseas credit card spending reached $8 billion in 2024, up 27% from pre-COVID levels.
The proportion of balances accruing interest has fallen from 72% in 2000 to 51%, suggesting more consumers are paying in full each month. “The debt trap is real … But Kiwis are getting smarter,” Walsh said.
Walsh urged consumers to manage debt proactively: “Consider a transfer to a 0% balance transfer card and/or dropping the available balance … or make a new year’s resolution and cut the card up.”