The amount of consumer debt advertising in NZ is Shocking

Last night I watched an American Movie to unwind after reading about some of New Zealand’s financial horrors. Mainly, the level of consumer debt in this country.  New Zealand is now surpassing the level of consumer debt at the time of the global financial crisis.

Consumer debt now sits at 168% of household debt to income.

Historic chart of the debt to income ratio in NZ. Currently sitting at 169%

The problem with watching movies on free to air TV is the ad breaks. And that is what I want to talk about now.

The first advert break pretty much explained to me the story of why there is so much consumer debt in NZ. The ad break had three consecutive ads for debt.

  1. The first advert was from ANZ and how they now have a mortgage coach.  They seemed to be willing to let young Kiwi’s borrow a $1,000,000 for a home in Auckland. So long as they don’t mind going to all the auctions in the rain.
Home loan offered to young people to buy million dollar properties in Auckland.

I was a little concerned because the young people in the advert only look old enough to have just started working. Taking on a mortgage of one million is a lot at that age.

But hey, as a nation we are really concerned about getting first Home Buyers onto the property ladder!

We go so far as to allow them to withdraw their retirement savings from Kiwisaver. And the government is willing to pay for a home grant as well. I always wonder how much of an effect on house prices this extra input from the government has.

Ok, so mortgage debt isn’t totally a bad thing. Indeed we do need it.

  1. The next advert featured the handsome actor Alec Baldwin. An actor and not a renowned commentator on compounding interest. He told me how I deserved that holiday and that Gem finance could make it happen for 25.99% interest.
Gem Visa offering you a ridiculous deal with an interest rate of 25.99%

Brilliant, I’m off to the beaches because it’s sunny there, and winter here. That would be great I thought until I saw advert number three.

  1. Wowwwww! A sparkly new SUV on offer at 0% per cent finance and zero deposit (subject to conditions- I have conditions that must mean me).
An amazing deal to get a new SUV at 0% finance and no deposit

I didn’t even need to go to ANZ from the first advert to borrow the money to get that 4 wheel monster I’ve always dreamed of at 0%.

And if everything goes south, I can go to ANZ, or GEM finance, and borrow some money against the house anyway.

I was so excited by this stage that I could barely concentrate on the film. When the same series of adverts repeated themselves in the next break I was beside myself.

Although this time Alec Baldwin told me I needed to renovate my bathroom- I deserved better.

And then I got offered a lay-Z-boy on 60 months interest-free. I can’t tell you, I was so excited that I didn’t sleep last night…

Have people forgotten that when the GFC happened?

The problem is there is easy access to credit. It is everywhere and tied to nearly every purchase you can make. And I can understand why lenders make money from people being in debt.

There is also the pressures of consumerism- keeping up with the Jones if you will. This drives people to want the latest devices and most expensive cars.

What do you think?

Is there too much advertising on consumer debt products? After all, I think that is where they are making the money. On the lending- not on the product.

I have taken a screenshot from YouTube citing the fair use guidelines “works of commentary, criticism, research, teaching, or news reporting may be considered fair use”.

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