Introduction

Credit cards certainly make life easier – they are simple to use, accepted almost everywhere, and help you to buy what you want, when you want, particularly online. So much so that living close to the credit limit has become the norm for many people and spending can quickly get out of hand.

To make sure your credit card works in your best interests, use these tips to stay on top of your debt.

Introduction

Australian households are the fifth most indebted in the world, according to data from the OECD. A typical family with disposable income of $100,000 has an average debt of approximately $210,000. And with rising interest rates and rampant inflation, the cost of living will only continue to escalate.

Home loans, credit cards, car loans and personal loans all contribute to financial pressure. One and a half million Australian households are currently under mortgage stress, so if you feel overwhelmed by debt, then rest assured you’re not alone. But with dedication and a smart strategy, you can quickly get your cash flow back in the black.

Introduction

There’s a quote that says, “Money can’t buy you happiness, but it can buy you a yacht big enough to pull up right alongside it”.

True if you’ve got that sort of money. For the rest of us, our spending is usually clothing, gadgets and cars – the kinds of things that make us happy.

Australian Bureau of Statistics (ABS) data suggests that consumer spending is influenced by job security and economic factors like interest rates and inflation.

Introduction

In these ever-changing and uncertain times in society, there has never been a greater emphasis on our health and wellbeing.

However, there is a crucial element that is often overlooked – our financial wellbeing. When addressing our overall health, it is essential that we also look at the responsibilities and stressors that come with managing our finances.

According to the Organisation for Economic Co-operation and Development (OECD), the average Australian household finds themselves in debt around 203% of their net disposable income, ranking us fifth worldwide behind countries such as Denmark and Norway. In this debt race, the further away from first place we come, the better!

Introduction

Australians were introduced to credit cards way back in 1974. Since then, we have embraced the plastic-fantastic with much enthusiasm, and why not? Credit cards meant no waiting; purchases went home immediately and were paid-off in monthly instalments – what could be better?

For some 40 years, no other credit facility came close to offering a viable alternative.

But around 2015, the game changed with the introduction of Buy Now, Pay Later (BNPL) schemes. Platforms like ZipPay and Afterpay enabled users to pay purchases off in weekly or monthly instalments.

Introduction

Prior to COVID, we were steadily moving towards a cashless world. Post 2020, even the most resilient of us has made the leap to tap-and-go payments sooner than we expected.

From the morning coffee to filling up the petrol tank, we wave that plastic with little thought to the impact on our account balances.

In fairness to us, many retailers are now adopting the ‘no-cash, please’ trading regime, but we Australians have a reputation for embracing technology and touchless shopping is no exception.

Introduction

If you’ve ever had a mobile phone, a credit card or any kind of finance – including a gas or electricity account – you’ll have a credit score.

Lenders check your credit score when assessing loan applications – the better your score, the more likely they are to lend to you.

Your score is based on factors such as:

Introduction

Over the past 30 years, Australians' household debt has increased. According to the Reserve Bank of Australia, our household debt-to-income ratio has risen from 70 per cent in the early 1990s to around 190 per cent today. With numbers like this, it's understandable that you might feel like you'll never get out of debt. Changing your thinking around your finances, however, and learning how to make sure your money is working for you will reap great rewards. Below, we've outlined a few ways you can create savings while paying off debt.

Introduction

By the end of 2018 Australia had, relative to the size of its overall economy, one of the highest levels of household debt in the world. At 127% of gross domestic product (GDP), our household debt, as a percentage of GDP, had nearly doubled over the last 20 years.

So are Australian households groaning under the weight of oppressive levels of debt? For the most part the answer is no. A major reason for the increase in household debt is that interest rates are much lower than they were 20 years ago, so it’s easier to service larger loans. And over 90% of our household debt is owner-occupied home loans and investment loans.

Introduction

They have been around for decades but interest-free deals can still be confusing and costly when not managed correctly.

Excitable advertising can make these offers almost too good to refuse, particularly with longer terms applying to higher levels of finance. For example, to get five years’ interest-free on purchases from some retailers, the minimum spend is $1,000. This simple condition could turn a necessary purchase of say, a new fridge, into a multiple purchase prompted by the seemingly innocent question, “do you need to upgrade your TV?”.

Five years up your sleeve to pay off a larger purchase may sound too tempting to pass up but never forget the age-tested maxim “buyer beware”. In the case of interest-free it’s not always as simple as it sounds.

Introduction

How many times have you downloaded a new app or connected to free Wi-Fi and agreed to the terms and conditions without giving them a second glance? In your rush to gain access to the must-have service you may end up agreeing to scrub public portaloos.

Of course, most companies who come up with absurd terms and conditions have no intention of enforcing them. Rather, the intent is to highlight the fact that most people don’t read the agreements they readily sign up to. In many cases that won’t have any significant consequences. Most businesses seek to be fair in their dealings with customers. However, in the case of legal and financial contracts, failure to read and understand the terms and conditions can prove costly.

Introduction

Before heading off on an overseas holiday, Sam decided to buy an expensive new camera to document his travels. The camera store offered a ‘buy now, pay later’ option, and attracted by the ‘no interest’ promise of the credit provider, Sam signed up.

All was well to begin with. Sam had a great time on his trip – in fact, maybe a bit too much of a good time. On returning home he’d maxed out his regular credit card and, with insufficient savings, he was unable to maintain the required repayments on his separate camera debt. And while, true to the issuer’s promise, he didn’t have to pay interest on the overdue payments, he was charged late fees on the repayments he skipped. Along with the standard payment processing and account payment fees, Sam’s camera ended up costing a lot more than he anticipated.

Introduction

If you think that being only a few days late making a payment on a loan doesn’t matter, think again. Even the smallest lapse could potentially affect your credit worthiness.

Most people are aware that a loan default will automatically be recorded on their credit report. However, what many people don’t realise is that under the Australian Privacy Act even late payments made to a credit provider will smudge a previously clean credit history.

Introduction

You can’t go anywhere these days and not see people glued to some device. Some of us wonder what we ever did without this modern-day “must have”, but love ‘em or hate ‘em, mobile (aka smart) phones are here to stay.

With all good things, there can be a downside. The cost of mobile phones and other devices is often not in the purchase but in the upkeep, and as many teenagers are discovering (some too late), smart phones can destroy a good credit rating even before they’ve left school.

Introduction

Talk about hammering the plastic. In May 2021, Australia’s 13.3 million credit card accounts were used to make over 276 million transactions with a total value of $27.9 billion. Card holders who don’t pay their balances in full every month are currently paying interest on more than $20 billion worth of credit card debt. Interest rates range from 10% to 22% per annum so that adds up to billions of interest owing – and growing!

It’s not just the easy money that cards provide; it’s the easy form of delivery via “tap and go” that’s pushing our debt to extraordinary levels. The quicker the transaction, the less thought or planning required. Pay now and think about it (and deal with it) later.

Don’t become a statistic - here are some things to look out for plus a few tips.

Introduction

What would you do if a family member asked to borrow money – besides the less painful option of beating yourself over the head with a fence paling? You want to help, but you’re right to be wary.

It’s a difficult subject that despite everyone’s best intentions, often ends in tears.

You’ve worked hard, saved for retirement, paid off your home and raised your kids. You’re sitting on a nice little nest egg and expect life to be cushy. Here it comes:

Introduction

The pictures are enticing: ocean blues and hibiscus pinks; white beaches and nightclubs. For twenty-somethings, tropical holidays are rites of passage few can resist; fewer still can afford them – even if we think we can.

The Thailand package was only $500, but Simon, having just paid his car rego was broke so he decided to pay for it using his credit card. However, after adding airfares and travel insurance his credit was maxed out before the plane left the ground!

Simon’s situation is common. We easily justify using credit for things we know we shouldn’t, but temptation is cruel, often irresistible.

Introduction

Payday lenders are flourishing and while their advertising makes it all sound so simple, there’s always a price. Here is a better solution.

Sarah decided to replace her clapped-out car with a shiny new one. The repayments were affordable: $350 per fortnight over three years – easy!

All was going well until...

Introduction

Going to university is a time of growth and independence, although the associated costs can make it an expensive proposition. Yet as Ben found, there are ways to minimise the cost and kick-start your financial future.

Introduction

If you have borrowed money, whether as a loan or even signed a mobile phone contract, you have earned yourself a credit history. Each time you apply for further credit, the lender will run a check on your credit file to determine the level of risk they take on by lending you money.

With the increasing incidence of identity fraud, it’s smart to check your file every year. Don’t wait until a loan application is denied to find out if your history is affecting your future.

Know your credit history

Introduction

Whether it’s for buying furniture, a car, or a home, the majority of Australians have used debt. For most, repaying debt is a formality, but for others who cannot manage their debt, it can be the first step on the slope to bankruptcy. Fortunately, alternatives are available.

Introduction

Christmas is a time of giving and receiving, but as we approach this most dangerous time of the year for credit cards, we’d like to give you a quick refresher on the best ways to use your plastic so you don’t end up with a Christmas hangover of the financial kind.

Introduction

For the past few weeks my partner and I have been enjoying the planning of our annual holiday. We both work long hours but always make sure we get away for at least two straight weeks to a place where there is no mobile phone or email access. Those destinations are becoming scarcer but we don’t feel like it’s a holiday if we’re still contactable.

Another golden rule we always follow is we have to be able to pay for the entire holiday upfront.

Obviously not everyone is as disciplined and a lot of people spend up big using their credit cards to pay for holidays. If that applies to you, here are some tips to help you save for your next big break without relying on debt.

Introduction

When choosing the right type of loan to suit your needs now and into the future, there are many factors to consider.

What is the purpose of the loan?

Introduction

The Australian Bureau of Statistics estimates that the average amount of money Australian households owe on mortgages, credit cards and personal loans combined is approximately $.......... per household. In 20...... it was reported that the most common form was credit card debt held by ....% of households.

Some debt, such as money borrowed to invest, is considered more productive than borrowing to buy stuff or pay bills. If your debt is not productive and is weighing you down, there are some solutions for winning this battle. Here are three...

Introduction

The word “thrifty” is rarely thought of in a positive sense but that’s not fair because if we continually spend more than we earn, our debts will eventually catch up and other words such as “default” or “bankrupt” might become more familiar.

Being thrifty doesn’t mean doing without – quite the opposite. Here are six simple tips to build up your savings.

Introduction

Debt can be a wonderful slave but an unforgiving master.

Australians have an extraordinarily high level of consumer debt. It fuels our lives. For example, there were more than 276,700,000 credit card transactions just in the month of May 2021 – valued at more than $27 billion! ($443 million of this was in cash advances). The scariest part of this equation is accruing interest on outstanding balances. With interest rates ranging from 10% to 22% per annum, billions of dollars are being added to these outstanding balances every year. Banks LOVE credit cards!

Please don’t misunderstand; properly managed debt can be a great tool. Most people need it to help them purchase their first house and other necessities in life.

How to master your debt