Tag: credit card debt

Credit Card Reforms 2020

Post author By Christopher Riotto
Post date 24 April 2020

Credit cards can be great, but they can also cause bad debt.

It’s true that many of us have a love/hate relationship when it comes to our credit card. It’s great being able to swipe and pay with ease and offers so much convenience. At the same time, it is easier to spend above our means and get hit with a nasty bill at the end of the month that we may not have budgeted for. While credit cards can be really useful, they can also carry a heavy burden of debt with them. This is why credit card reforms are brought in; to help to protect you from sinking into unmanageable debt.

It is so easy to find yourself in a place of debt, with monthly fees added on top of your spending. The fact is, many people take out credit cards without being aware of how they work. For example, when are the fees applied and how can you manage things when you find yourself in a place of debt? For this reason, it is easy for people to spiral further and further.

Discover what changes the credit card reforms of 2020 have brought to the table and what they mean for you as a consumer.

Background for Credit Card Reforms 2020

The latest credit card reforms came into effect in January 2019.

In July 2018, ASIC released Report 580 Credit card lending in Australia. This found that more than one in six consumers is struggling with credit card debt.

ASIC’s review of credit card lending found:

In June 2017 there were almost 550,000 people in arrears. In addition, 930,000 people had persistent debt and an additional 435,000 people were repeatedly repaying small amounts.
Consumers carrying balances over time on high-interest rate cards could have saved more than $621 million in interest in 2016–17 if they had carried their balance on a card with a lower interest rate.
63% of consumers did not cancel a card after a balance transfer. A substantial minority of consumers increased their total debt after transferring a balance.

The report made it clear that ASIC expects credit providers to:

Take proactive steps to address problematic credit card debt and products that do not suit consumers.
Minimise the extra credit provided to consumers who regularly exceed their credit limit.
Allocate repayments for all credit cards in the more favourable way required for cards entered into after July 2012.

These are general expectations of lenders, however, they are not legal requirements.

In September 2018, ASIC (the Australian Securities and Investments Commission) set a three-year period to be used by banks and credit providers when assessing a new credit card contract or credit limit increase for consumers. This means that credit providers must not provide a credit card with a credit limit that the consumer can’t repay within three years.

The aim of the 2020 credit card reform is to:

Prevent consumers from entering into an unsuitable credit card contract.
Ensure consumers have access to suitable credit card contracts.
Make it easier for consumers to cancel credit cards.
Ban unsolicited credit limit increase invitations (which can lead to people borrowing above their means).

Credit Card 2020 Facts

Here are some credit card facts, sourced from finder.com.

There are 14,088,998 credit cards in Australia as of May 2020.
Netting a national debt accruing interest of $23 billion.
Average credit card purchase: $105.38
Average percent of credit limit reached: 29%
National Australian spend on credit card purchases each month: $25,023,743,718.
70% of Australian adults own a credit card.
Age groups with a credit card:
- 65.07% are 18-35
- 82.18% are 35-54
- 79.84% are 55+.

How Do Credit Reforms Work?

The three-year period was chosen by ASIC after consulting with several banks and industry bodies. The idea is to ensure that the provider of the credit card is comfortable that you can pay off your credit limit in three years, before approving your application.

Rather than stopping people from being able to take out credit, these credit card reforms 2020 are in place to stop consumers from getting into debt.

Here are some commonly asked questions when it comes to the credit card reforms 2020:

Can I still take out a credit card?

Yes! You will still have the flexibility to make a low credit card repayment each month. The three-year period was designed to help consumers needing larger loans to have longer repayment options available.

How do banks and lenders assess whether I can pay back my card?

Each institution will have its own processes in place for determining this. This may involve looking at your credit history, including your credit score, along with the current financial situation.

While these credit card reforms 2020 may result in some people not being able to take out a credit card, it is likely only to affect a very small number of people. Consumers are still welcome to shop around for the best deal when taking out a credit card. Hopefully now with the aim of being able to pay them back without getting further and further into debt in the process.

Want to know more about taking out a credit card and how to make the process as easy as possible? The team at Australian Lending Centre can help you out. Simply give us a call or fill out an enquiry form today and get yourself set up on the path to financial stability (and not debt). We can also help you to find out how you will be assessed when it comes to taking out a credit card.

Tags 2020, credit card debt, credit card reforms, credit card support, credit cards, guidance, help, responsible lending

Credit Card Consolidation

How to overcome credit card debt

Post author By Christopher Riotto
Post date 13 December 2019

overcoming credit card debt

Taking out a new credit card for the first time is a huge, exciting milestone. You suddenly find yourself with access to more money when you need it. Of course, this is all money that needs to be repaid on time. If you miss payments the interest will start adding up and you will find yourself in more debt than you bargained for.

This is a path you want to avoid if possible, but if you do find yourself here, don’t stress.

Tips to get out of credit card debt

Get in the Right Mindset

There is no point in tackling your credit card debt unless you are ready to make changes to your financial spending. Otherwise, anything you achieve will be short term and you will find yourself back in the same situation again and again.

The first thing to do is to take a look at your finances and see where all your money is going. While occasionally, bad credit card debt can be the result of an unforeseen circumstance, such as a medical emergency, for most people they arise as a build-up of spending beyond your means.

Go back through your credit card statements from the past year with highlighters:

Green = necessary expenses

Orange = luxury expenses

Take a look at all your items that are highlighted orange and see what you can cut back on.

Other tips including leaving your credit card at home on trips to the shops so that you aren’t tempted to spend on things you don’t need, and keeping track of all your credit card expenses each month, and putting the card in a safe place once you have reached a limit you are able to pay back on payday.

Once you have had a look at your finances and attempted to get them in check, you are in the best position to get yourself out of credit card debt and to stay out.

Techniques you can use to tackle your credit card debt:

Snowball Effect

Got multiple credit cards all with debt owing? Tackle them one by one. This is the perfect way to give you that initial confidence boost to fuel the rest of your debt repayments. Don’t just ignore the other cards in the process. Make their minimum repayments each month and then work on the one card to pay back the debt.

Pick your card with the lowest balance owing and start with this one. This will be the quickest to pay off and will get the ball rolling for you. Once you have paid the smallest, move onto the next smallest until you are just left with the largest debt owing.

Snowflake Effect

Whenever you come into a little extra money, no matter how small, you send it to the credit card company to put towards your debt. Rather than mindlessly spending every extra $5 you come across, you will find it can add up nicely if you send it in. Think of it as, out of sight and out of mind.

Avalanche Effect

This is the opposite of the snowball effect, where you start by paying off your most expensive credit card first and work your way down. This method tends to be faster and cheaper, but it can be a lot more intimidating when you first start.

Go for a Lower Interest Rate

It can’t hurt to ask, right? Ring up your provider, and assuming you have a good credit history and made timely repayments see if they will reward you with a lower interest rate to pay off your debt. If you can shop around and get a lower rate from a competitor, then it is worth mentioning this in the phone call as a little extra push.

Take Out a Consolidation Loan

It may seem counter-intuitive, but taking out a personal loan can help you pay off all the debts while saving a little cash in the process. The interest rates on personal loans tend to be lower than those of a credit card, so if you do your homework and find a good deal, you could end up saving by using this approach. Of course, you still need to work off paying the new loan now.

Ask for Help When You Need It

If all else fails, ask for help. There is no point sitting there and getting further and further into debt with no way out. There are plenty of debt relief options out there that you can choose from, including:

Debt management

You can have someone advocate for you to negotiate new terms, either a lower balance, lower or no interest rates, to help reduce your debt and make paying it off easier. In return, you pay a fixed amount each month, which is then applied to your debts across the board.

Part 9 Debt Agreements are a formal agreement where your debts are managed. This step is to avoid bankruptcy and does impact your future credit rating.

As a last resort, when you simply cannot pay your debts is where you can file for different types of bankruptcy depending on your situation, but it does come with serious long term consequences so must be considered it wisely.

Tags credit card debt

Debt Management Credit Card Consolidation Financial Fitness

Strategies For Getting Your Credit Cards Under Control

Post author By Jack Richings
Post date 28 November 2019

Plastic money, where all you have to do is swipe a card and that product or service is yours. It’s great, right? Until you receive your credit card bill and realise you don’t have the funds to pay it off. Before you know it, the interest starts to soar and your credit score takes a whack. Don’t worry, you’re one of many to have fallen into this trap! Fortunately, there are ways of getting your credit cards under control before it’s too late.

Here are six ways for getting your credit cards under control

1. Pay MORE minimum monthly repayment

Or more, if you can afford it. You have three choices when it comes to making your repayments:

You can pay the full amount and take advantage of the interest-free period on your card.
Pay more than the minimum repayment to limit the amount of interest charged.
You can pay just the minimum repayment. This is the least recommended option, as the interest will build up. This may lead you into more debt down the track, which is hard to get out of.

2. Lower those rates

All it takes is asking! The fastest and easiest way to ensure you get back control of your credit card is to shave off a percentage or two on your interest rates. Even a small amount can save you hundreds when it comes to paying off your debt. Call up your bank and simply ask! Your credit score is likely to play a role in whether or not this will happen, but either way, it never hurts to give it a shot.

3. Pay down your HIGHEST rate card first

This one makes sense. If you have a few different credit cards that you are owing money on and you can’t afford to pay them all off, start with the one with the highest rate. This is also known as the ‘Avalanche Strategy’. Tackle the card with the highest interest rate first, while maintaining at least the minimum repayments on the others. Once you get the first one paid off, you can work your way down to paying off the rest.

This method ensures you pay as little interest as possible while making these payments and getting your way out of debt. As you work down through your debts, the amount you can put towards repayments on the next debt increases with each cleared debt – creating an avalanche effect.

4. Budget

If you don’t have one already, now is the time to put one into place. Factor your credit card repayments into your budget, so you stay on top of them. Look at how much you are spending each month on each one and compare this to how much you earn. If you are spending more than you earn, then it is time to cut back.

If you are already in credit card debt, then add this to your budget. Plan to pay a little bit off each week, to make sure you are working to an end goal. If you are in debt, then set aside your credit card for the essentials until you have paid it off.

To get a good look at your spending patterns, check out your credit card statements. From here you can assess where to make cut backs. Utilise a free online budget planner to quickly understand where your money is going.

5. Pay off Your Smallest Balances

Depending on how many credit cards you have, you could find yourself a little overwhelmed. Start small and work your way up. This one is known as the ‘Snowball Strategy’. The idea is that you feel so much better getting one card paid off fully. This will give you the momentum to tackle the next one and then another after that.

This positive cycle continues and ‘snowballs’ until all your cards are paid off and you are back in control again. Unlike the Avalanche strategy, you could end up paying more in the long run, as you are ignoring which cards have higher interest rates and paying them off based on the amount instead.

6. Have a goal

Whether your goal is to be completely debt-free, or simply to be on top of your repayments, it is important you have this goal in place when it comes to taking back control of your credit cards. To keep yourself accountable, it can help to talk to a close friend or family member, so you stay on track and don’t find yourself too overwhelmed in the process.

Taking back control of your credit cards will have you in a healthier position for some long term goals, such as travel or taking out a mortgage. Remember, start small and build your way up again and you will soon find yourself debt free and able to stay that way. Think next time you pull out that handy little piece of plastic to pay for something.

Tags credit card debt, credit cards, Debt Management, debt relief, pay off debt

Credit Card Consolidation

Should You Invest in spite of Your Credit Card Debt?

Post author By Diane Challis
Post date 12 December 2017

Investing enables you to expand your finances. If you leave your money in a bank, it won’t do anything for you except gain you minuscule interest on your savings account. However, investing your money while having credit card debt isn’t necessarily the best decision either. Why is that? Simply put: the interest rate on most credit cards is typically higher than the estimated rate of return you get when you invest your money. Choosing to invest when you have credit card debt isn’t always a smart idea. An investment could bring in a surge of money to help you pay off your debt if you are lucky. However, if not then your debt will keep stacking up because of the interest and you could find yourself further out of pocket.

Am I losing money if I invest, in spite of my credit card debt?

The simplest way to comprehend this is by looking at the numbers. In other words, you should have a look at the return on investment. Some credit cards have interest starting from 17 per cent.

Thus, if you choose to do so, you could end up paying a higher interest rate due to your credit card debt. This will not bring you any earnings.

Unless you have a considerable amount of money directed towards investments, you’ll end up losing money. However, if you do have money at your disposal, it would be best to get rid of your credit card debt and only afterward proceed with the investment.

As soon as you finish paying off your credit card debt, you can maximise your earnings by investing. In truth, this is a fundamental practice for acquiring wealth. By combining savings and investments, you’ll reach a point where your money works for you.

How about saving for retirement?

Now moving on to retirement: does it make an exception to this rule? Yes. In fact, we find that it is highly recommended to invest in your retirement account via your work. After you have eliminated credit card debt for good, you can continue investing approximately 15 percent of your income.

For instance, after you have saved enough money for getting a home, a car, or any other significant purchase, you could start putting money aside for investments. We advise you to choose mutual funds; these enable you to diversify your investments, which is the key to success.

How do you start investing?

As a rule of thumb, if you aren’t acquainted with this procedure, you should ask for the assistance of a financial planner. He/she could aid you to plan wisely, to accomplish your financial objectives.

You could begin by using mutual accounts, as we pointed before. That’s because mutual accounts pose fewer risks, considering that they are shared by different stocks. In time, you could choose to invest your money in various ways. After you start to comprehend the way in which the market works, your earnings will grow.

Still, do bear in mind that it isn’t recommended to direct all your money towards a singular fund or share. Such a move is way too risky. Another option would be investing in real estate. However, bear in mind that in order to generate value, you should try to purchase it with cash, if possible.

To conclude, investing is a move that requires in-depth thinking and consideration. You shouldn’t go for it when you’re still in debt. However, when your financial status is on the right path, you should go for it (after carefully assessing your options, of course). Australian Lending Centre provides comprehensive financial advice, so if you want to start investing, you might want to talk to one of our consultants. With smart thinking and professional help, you might actually start reaping benefits.

And if you need to consolidate your credit cards to get rid of these debts, enquire with us today to find out how we can help you.

Tags credit card debt

News

Tips For Paying Off Overwhelming Credit Card Debt

Post author By Diane Challis
Post date 24 May 2017

Do you see nothing but credit card debt when looking at your budget? It’s easy to get overwhelmed in debt, but there are solutions. Here are our top tips for paying off credit card debt.

Extensive loans and consumer debts are becoming a part of our lives. People need money for their daily expenses while in between jobs; others need quick cash when facing emergency situations. Even entrepreneurs need to inject funds to their working capital when cash flow isn’t enough. But, what would happen when you wake up and all you see are unpaid credit card bills, notices from debt collectors and court summons?

Relying on credit cards every time you have cash flow problems can definitely hurt your wallet. But there are some steps you can do to avoid carrying a balance from one month to the next and accumulating hefty interest charges.

1. Make a credit card spreadsheet

Do you want to see how much is your current total debt? What about the average interest rate as well as the average interest you pay each month? If you want to see the total amount you have already paid on your credit cards and the total payment you are making each month on those debt accounts, create a credit card spreadsheet.

Write down the following:

Name of your creditors
The outstanding balance for each card
Interest rates
Required minimum monthly payments for each account.

Decide on the maximum possible amount you could put towards paying down all your credit card debts, based on your current budget. Select the repayment strategy that would quickly pay off your debts. Is it snowball or highest interest first?

When deciding which of these methods to use, here are factors to consider:

How much interest can I save each month?
What is the total amount I will end up paying?
How long will it take me to be totally free from debt?

Decide how much money you need to dedicate to each credit card account every month. Write down the total amount of money you want will use to pay down your debts. Determine the portion of that amount you would apply to each card.

2. Consolidate

One of our top tips for paying off credit card debt is in the form on debt consolidation. It is not easy to manage multiple debts, especially if you don’t have enough money to make minimum payments each month. If you feel overwhelmed by debts and you are missing monthly payments, debt consolidation can help.

ALC helps customers through their debt consolidation program that enables them to take their multiple credit card debts and other bills and roll them into one loan with better terms. The repayments are lower and the terms of the loan are more flexible than what your credit card provides.

With debt consolidation, all your outstanding credit card debts along with other financial obligations you incurred will be combined into one. The loan specialists at Australian Lending Centre will also negotiate with creditors on your behalf. As a result, you can refinance your loan, get a better deal and lower the monthly payments.

Contact the Australian Lending Centre for more information on credit card debt consolidation.

Tags credit card debt

Debt Consolidation

Questions You’ve Had about Consolidating Debt But Haven’t Asked

Post author By Diane Challis
Post date 26 April 2017

Debt consolidation is regarded with kind eyes by many Aussies and often described as a solution to all of your problems. Just like the name says, debt consolidation refers to putting all of your debts together, in order to keep track of your payments easier. But perhaps you have questions about consolidating debt. Maybe you are unsure how it works and confused about how you can save money by choosing this finance option.

In this article, we reveal all!

Is Debt Consolidation the Right Choice for You?

If you’re making multiple payments per month, then you know by now that each comes with different interest rates and fees. In this case, yes, debt consolidation is the right call. Also, by consolidating your loans, you will always have to make one monthly payment, instead of sending money to a number of lenders.

Here are the top 6 questions about consolidating debt:

Can I combine my home loan with my personal loan?

Consolidation allows you to combine all of your loans into a single one, regardless of their type. Keeping track of your home loan, car loan, personal loan and so on can be tiring. This is a time-saving solution.

How will consolidation benefit my expenses?

Some loans have bigger interest rates than others. By combining them, you will have a fixed rate that you’ll pay monthly. This way, you’ll know exactly the amount you’ll have to repay, without also having to deal with various taxes and fees that accompany each loan.

Am I eligible for consolidation?

Everybody can choose to consolidate their debt. Still, check with your lender and see if your home loan allows you this option. If not, try to change the features or simply look into a refinancing that incorporates debt consolidation.

Is it better to pay my car loan in 30 years?

When you combine all your loans, you can choose to prolong the payments, in order to fit your home loan. Unfortunately, even though your rates will be lowered considerably, the interest fees will expand due to dividing the car loan for example, over a period of 30 years. You can adjust the debt consolidation to fit your needs.

Should I consolidate if I have bad credit?

This is actually the main reason why people consolidate their debts. Debt consolidation tells lenders that you have placed your affairs in order and are serious about improving your financial situation. Also, it will enhance your credit score.

How can the equity in my home help?

Through debt consolidation, the equity in your home can reduce significantly the interest rates you’re paying each month. Being a secured line of credit, a home equity loan will use the equity in your home as collateral, which can lead to a fixed and smaller interest rate.

If you’re having financial problems and can’t afford to pay back all your loans, expanding the loans over a longer period of time will help you get back on your feet by paying less each month. So, talk to your lender about this option.

Debt Consolidation

Credit Card Debt and Mortgages Being Managed Properly

Post author By Diane Challis
Post date 28 March 2016

This year has been a profitable one for Australian credit card debt and mortgages. According to the latest percentages, Aussies seem to be managing much better with their mortgages; their mortgage repayment appears to be going along much better than when compared with the previous year. Reports from the ABS data showed that their credit card debt had already dropped by 2.4% in January.

In the Money Survey from 2016, Mortgage Choice has discovered that at least ¼ of the respondents were faced with almost 12% month’s worth of wages in their offset account or going towards paying their mortgage. When compared to this situation, around 13% of Aussies claimed that they were facing this exact financial position somewhere around last year.

Aussies Can Now Manage their Credit Card Debt

CEO John Flavell has come to the realisation that today’s mortgage holders have become much more comfortable when it comes to dealing with their credit card debt. He also added that this isn’t surprising in the slightest since interest rates are currently standing at 60-year lows, which results in drastic mortgage repayments. This, in turn, makes it easier for homeowners to pay off their debts.

So, it seems Aussie cardholders have become used to managing their card debts, keeping it 34% lower in the month that followed Christmas. Average balances have gone from $77 to $3,114, and the conclusion was that the users are now savvier regarding the use of their credit cards. They are now paying off their debt before their deadlines and maximise their loyalty points by using their cards.

Australians have also become more imaginative when it comes to creating strategies that keep their balance down. They are now mostly opting for cards that have a 0% balance transfer, and thus they can pay off their balances without creating even more debt in return.

Ways to Manage Your Credit Card Debt

In case you were also wondering how to keep track of your credit card repayment, here are some money and credit card tips that could prove very useful.

Check your budget and see if you can make some extra mortgage repayments to lower your debt in interest which is going to get built up over time. Find a good strategy that would suit you, or look up for repayment calculators that will allow you to do the necessary calculations.
Make your next repayment a little higher than you normally do in order to lower your credit card debt. This way, you will be paying less interest.
Make use of features that are relevant to your home loan. Make extra payments to minimise the interest, then redraw the facility to make it convenient for you.

While managing your debts can prove to be difficult at first, with a little bit of research, you can find out ways to properly manage your mortgage and credit card debt.

Tags credit card debt, credit cards, money management, mortgage repayment, mortgages, savvy consumers

News Debt Management

Many Australians Are Turning to Debt Agreements

Post author By Diane Challis
Post date 4 November 2015

Debt agreements are an alternative to declaring bankruptcy. Rather than be haunted by the irreversible effects that bankruptcy can have on your credit record, entering into a debt agreement can give you a debt-free fresh start. They’re becoming the popular choice for Australians in need of debt solutions. Debt agreements are overseen by the Australian Financial Security Authority (AFSA). As a government body, it’s AFSA’s job to regulate debt agreement administrators, in order to ensure they are resolving debt at the highest standard possible. The AFSA has been finding an increasing number of Australians are turning to debt agreements to solve their debt problems.

Why So Many Australians Are Turning to Debt Agreements

Although a debt agreement is technically an act of bankruptcy as it is under the Bankruptcy Act of 1966, it is considered another option to going bankrupt. There are also many differences between the two, making one look like a much better option to thousands of Australians. A formal debt agreement will appear on your credit file for five years and can prevent you from obtaining further finance during that time.

The AFSA has reported that there were 28, 288 personal insolvency cases reported across Australia during the 2014-15 financial year. Additionally, their June report found that there was an increase of 4.3% for people who entered into Debt Agreements compared with the March quarter. That figure rose from 2,568 to 2,678. Of the Australians who entered Debt Agreements, only 7.7% of them were for business-related reasons, which suggest that the rest were personal debts like credit card debt from overspending.

The amount of Australians entering into debt agreements for personal reasons shows that as a nation, we frequently get over our heads in arrears. Whether getting into uncontrollable debt is due to living beyond our means or just poor budgeting remains to be seen. Debt agreements are for unsecured debts; unpaid credit card, telephone and utility bills. The Australian Securities & Investments Commission (ASIC) puts the nation’s credit card debt at nearly $32 billion, which works out to approximately $4,300 per cardholder. That’s quite a lot of unsecured debt. It’s no wonder people are having difficulty making repayments.

Debt agreements are for people without a former bankruptcy on their credit record, who want to pay back their creditors. Going through a practitioner who specialises in agreements, your debt is negotiated with creditors and merged into a big sum that you pay back over time. If you have a debt agreement, the interest is frozen and anyone you owe is no longer able to contact you to request payment. It takes away the multiple burdens of debt collectors sending letters and making phone calls.

If you’re in need of a solution to your financial burdens, fill out our enquiry form and find out how we can help you.

Tags australia, australian debt, bad credit, bad credit rating, bad debt, credit card debt, credit cards, Debt, debt agreements, debt assistance, personal finance

Credit Card Consolidation

How to Use Credit Cards to Your Advantage

Post author By Diane Challis
Post date 11 June 2015

Credit cards are known to be risky business for some people. If you have trouble balancing your budget every month then taking on a credit card or two should be your very last resort. If on the other hand, you are able to balance your monthly budget as well as save regularly then you are probably financially savvy enough to handle the responsibility of a credit card. Learn how to use credit cards to your advantage in this article.

Credit Cards – Tips and Tricks

Credit cards do generally have high interest rates on the balance that is left over after the pay period. If you always pay off your balance at the end of every billing period then you may be able to take advantage of the credit card. This is a huge convenience if you are short on cash just before pay day or if you have a big expense that your checking account cannot cover. It might usually take time to gather up the funds for that large purchase and if you pay off the balance when it is due then you have basically gotten yourself an interest free loan. You can look at it as a free loan from the time you made the purchase up until you pay it off. If the loan period is maximised then you could, in practice, get a 55 day loan without any interest.

You can have your credit card provider take the balance due directly from your savings account each month. Bypassing the tedious chore of transferring funds each month, you have essentially created an interest free form of cash available to you at any time. Any big surprises can be handled with the swipe of your plastic but this is all assuming that you can keep enough in your savings account to handle those payments.

If you are able to keep this balancing act going for long then you can take advantage of the incentives that some credit cards have such as points or cash back programs. A credit card with a good points program usually has a yearly fee. The fee can be outweighed by the big gains that can be made if you play the points game well. Having all of your purchases funneled through a points reward credit card can quickly grow your flight credits or give you big cash back returns. Some credit cards can also offer insurance on purchases. Even though all forms of credit including credit cards have risks, with discipline, the advantages can outweigh the risks.

Tags credit card debt, credit card debt consolidaton, credit cards, high interest debts

Credit Card Consolidation

Avoid Holding High Interest Credit Card Debt

Post author By Diane Challis
Post date 15 December 2014

Surprisingly, while the national interest rate on cash has gone down in Australia the average interest rate on credit cards has risen. Now is definitely the time for Australians to consolidate their credit card debts. Credit card debt is a $50 billion burden on Australians and around $35 billion of that is getting interest added to it. The nation’s interest rate on cash for banks has sunk to 2.5 per cent but most credit cards have an interest rate of 17 to 22 with the highest rate going up to 23.5 per cent. You can avoid high-interest credit card debt with debt consolidation.

High Credit Card Debt

Credit card debt can be a vicious trap and now is one of the best times in recent history to escape that trap. Credit card consolidation can help manage a person’s mounting debt and help them dig themselves out from under those heavy interest payments. A personal loan to pay off the credit cards can have a much more competitive rate and can make the difference between hundreds or thousands of dollars in a very short amount of time.

National interest rates and credit card rates are not specifically linked together and there are some noted differences between the two. The debt on a credit card is not backed up by any collateral and is therefore a higher risk to the credit card companies than a house or a car. Based on that simple fact, the credit card companies can charge much higher rates.

As a consumer, you have the ability to shop around and find a way to consolidate that debt from different credit cards and total them all into one sum that can be charged at a lower interest rate. This is one of the easiest and most reliable ways to cut your interest payments and look to a brighter future without looming debt in your future. Credit card consolidation is the best way to battle large credit card debts and the large credit card companies that charge more and more each year.

The national cash interest rate has nearly halved in recent years but the credit card interest rate has barely budged and in some cases has even gone up. A person with multiple credit card debts has a great chance right now to trade in their credit card bills for one bill with a much lower rate by consolidating their credit card debt today.

Tags credit card debt, Debt Consolidation, high interest debts, personal loan

Credit Card Consolidation

Australia’s Credit Card Debt – What to Know

Post author By Diane Challis
Post date 19 August 2011
No Comments on Australia’s Credit Card Debt – What to Know

Australian consumers are now more cautious about their spending. They are now more inclined to increase their savings and clean up their credit card debts. This observation is according to financial experts from Bendigo & Adelaide Bank. They added that local households are now aiming to put their finances in better order due to the uncertainty about global economy especially after recent reports about credit woes in the US.
Australia’s credit card debt is proving to be interesting and conflicting.

Continue reading “Australia’s Credit Card Debt – What to Know”

Tags australia, credit card debt, credit cards, Debt, Debt Consolidation

Debt Management

Government Survey Gives Insight into Australian Debt

Post author By Diane Challis
Post date 24 May 2011
No Comments on Government Survey Gives Insight into Australian Debt

It seems Australians are not entirely money-conscious when it comes to entering into debt, as a recent Federal Government report has found. In this article, we take an insight into Australian Debt.

The latest survey conducted by the Financial Literacy Foundation has divulged details about the general attitudes towards credit and debts amongst the Australian population.

The nationwide survey found, 21% of respondents will get into debt by buying things they cannot afford, and 17% pay only the minimum amount owing on their loans.

Tags australian debt, credit card debt, credit card debt consolidation, credit cards, Debt Management

Credit Card Consolidation

Eliminate Your Credit Card Debt

Post author By Diane Challis
Post date 23 May 2011
No Comments on Eliminate Your Credit Card Debt

When you are in over your head with credit card debt, relief can seem unreachable. It can feel as though you are working as hard as you can just to make the minimum repayments. If you are serious about getting on top of your finances, then follow these steps to eliminate credit card debt be on your way to financial freedom.

Step 1 – Switch to a lower rate card

If you can switch your balance from a higher rate card to a lower rate card, you can save quite a bit of money. Even a card with a 5% lower interest rate will make a difference on the amount you owe on your monthly credit card statement. The money that you have then saved can be applied to reduce your debt even faster.

Step 2 – Make lifestyle adjustments

Many people find themselves falling into the trap of only paying the minimum credit card payment each month, but if you make a habit of this you will never get out of debt. Figure out ways that you can cut out weekly spending, such as eating from home or preventing yourself from making that impulse purchase that you know is not a necessity. Once you can eliminate your unnecessary spending habits, you can use the money you save to make larger repayments on your credit cards, and see your way to becoming debt free faster.

Step 3 – Don’t add to your debt

Make yourself a rule that you can only use your credit card for emergency payments or special purchases. Don’t use your credit card to purchase needless items. You may think it is convenient to make impulse buys on your credit card, but realistically they add up and you can end up paying more for them in the long term.

Step 4 – Call Australian Lending Centre

If you have been unsuccessful with the above steps, there is still hope. You can eliminate credit card debt by calling Australian Lending Centre on 1300 138 188. Speak with a debt consultant today. We specialise in debt solutions such as debt consolidation, debt agreements, debt consolidation loans, refinancing, mortgages and bad credit loans.

We may be able to help you consolidate your debts such as credit cards and personal loans into one so that you will only need to make one regular repayment as opposed to multiple. We also have a solution available that can freeze your current interest and prevent any further interest and charges. To find out more, call 1300 138 188 today.

Tags credit card debt, credit cards

Credit Card Consolidation

Credit Card Debt on the Rise

Post author By Diane Challis
Post date 23 May 2011
No Comments on Credit Card Debt on the Rise

Banks are hiking credit card interest rates, forcing many consumers into debt. This has put credit card debt on the rise.

Recent research from a National newspaper suggests that at least 5 major credit card providers have increased their interest rates within the past three months. This comes as a rude awakening for many as the Reserve Bank’s recent cash rate cuts of 2% should have seen the interest rates for credit cards drop.

Tags australian debt, credit card debt, credit card debt consolidation

News

Credit Card Reward Program Can Increase Debt

Post author By Diane Challis
Post date 22 May 2011
No Comments on Credit Card Reward Program Can Increase Debt

Reward credit cards can be a great tool as they allow consumers to earn points on charges that can be turned into perks such as cash back, air travel and merchandise. According to the credit card companies, the more you spend the more you will get back in reward points; however this is not always the case.

A majority of people use credit cards as a tool to make purchases such as airfares, accommodation, concert tickets, and general online or over the phone payments. However for consumers who let the promise of perks drive them to overspend, a rewards credit card can end up costing them significantly.

Tags credit card debt, credit card debt consolidation, credit cards

Debt Management

Australia is a Cash Based Society

Post author By Diane Challis
Post date 22 May 2011
No Comments on Australia is a Cash Based Society

The Reserve Bank of Australia has conducted a recent study that indicates that Australia is still a cash based society. However it is not to be overlooked that the use of credit cards continues to rise.

The RBA study of consumer payment behaviour found that cash accounts for 70% of all transactions. EFTPOS, MasterCard, and Visa Debit Card payments make up 15% of all transactions followed by MasterCard and Visa Credit Card transactions at 9%. Only holding 1% of total transactions is American Express and Diners Club cards.

Tags cash out, cash society, credit card debt, credit card debt consolidation, credit cards

Credit Card Consolidation

Australian Credit Card Debt has Risen

Post author By Diane Challis
Post date 22 May 2011
No Comments on Australian Credit Card Debt has Risen

The rising levels of credit card debt in Australia reached record levels in 2011. However, the number of repayments aimed at reducing credit card debt drastically fell.

While facing rising unemployment and a looming recession, Australians cut back on their credit card repayments by 7.1% in February. Australian credit card debt grew by 1.7% to a record $45.4 billion, equating to an average debt of $3,149 for every cardholder in the country.

Tags consolidation, credit card debt, credit card debt consolidation, credit cards, Debt Consolidation

Refinance and Refinancing

Aussies in Debt

December 2009 was the largest monthly spend by Australians in history, increasing the average credit card balance to $3,250. The majority of Australians are well aware of the risks involved in leaving credit card debt unpaid. A popular solution to credit card debt is to consolidate your debts into one loan. Aussies in debt is a growing concern, if you are struggling with debt try consolidation.

Over the recent holiday period, Australians demonstrated their confidence that we are coming out of the Global Financial Crisis (GFC) fairly unscathed. This was evident by the December spending peak of $22.02 billion, which was a vast jump of $2 billion from November.

On the average debt of $3,250, credit card spenders making minimum repayments of $100 will take years to repay their balance. However, Australians can save themselves on interest repayments by comparing rates to get the best deal. Another popular credit card debt solution is a consolidation loan. They are perfect for those who need to consolidate multiple credit cards, store card debt and personal loans and can drastically reduce the amount of interest you pay.

Tags credit card debt, Debt Consolidation, debt help

Credit Card Consolidation

Credit Card Spending was up in 2010

Post author By Diane Challis
Post date 19 May 2011
No Comments on Credit Card Spending was up in 2010

2010 saw Aussies coming out of the Global Financial Crisis (GFC) with their credit cards surging. In July, there was a banking report that stated we charged goods to our credit cards an astonishing 131 million times for the month. This figure is greater than any July in history and 3% higher than July 2009.

In addition to putting more on our cards, we are also being more careless about increasing our debt. In this same report in July, Aussies owed $47.8 billion which is approximately $3,268 per credit card. These figures were up 6.5% from 2009 or $159 per card. These are signs Australians spent 2010 thawing from the financial crisis and seem to be spending at a fast rate. If these figures continued in trend, Aussies may find themselves deep in debt.

Tags credit card debt, credit card debt consolidation, credit cards, debt consolidation options

Credit Card Consolidation

Practical Ideas to Manage Credit Card Debt

Post author By Diane Challis
Post date 8 April 2011
No Comments on Practical Ideas to Manage Credit Card Debt

Have you noticed how almost every commercial establishment is now making irresistible offers just to convince you to spend and it’s usually using your credit card? Credit card firms are also increasing credit card limits for many consumers to encourage spending. The consequence is quite logical. Many consumers across Australia are now caught into a vicious debt trap. Credit card debt problems are now commonly part of household troubles. Here are some ideas to manage credit card debt.

Tags credit card debt

Debt Management

Credit Card Debts Can Lead to Home Repossession

Post author By Diane Challis
Post date 11 May 2009
No Comments on Credit Card Debts Can Lead to Home Repossession

Home Repossession

A Brisbane couple lost their home valued at $315,000 over a credit card debt of only $8000. They only found out that it went to auction after the home was sold for $20,000 at a bailiff’s auction.

Legal Aid Queensland (LAQ) says it is just one of several cases of debt collection companies moving to sell homes at bailiffs’ auctions to recover credit card debts of any amount.

Since November, LAQ has handled five such cases, negotiating with creditors and stopping the auctions at the last minute in four of them. In one case a debt collection company tried to sell a home over a debt of only $850.

It has been reported that some major banks and multinational lenders are allowing customers to increase their credit card limits by as much as 40%. The Congratulations, You’re Pre-Approved report, commissioned by the Consumer Action Law Centre, said banks and credit card providers were using psychological tactics to trick consumers. The report called for law makers to consider banning, or at least restricting the marketing of unsolicited credit card limit increase offers.

If you receive a letter from your credit card lender offering you an increase on your credit limit, we advise you to think of the repercussions of getting in over your head before accepting. If you are currently struggling with debt there are alternative solutions to having your house repossessed.

We may have a debt consolidation option tailored to your situation. If you have debts of $10,000 or more, don’t wait another minute. Pick up the phone and call us today on 1300 138 188 and receive a free consultation with one of our debt consultants.

Tags credit card debt, credit cards, Debt Consolidation, home repossession, refinance

Debt Management Credit Card Consolidation Financial Fitness

Don’t Carry Debt in an Economic Downturn

Post author By Diane Challis
Post date 16 February 2009
No Comments on Don’t Carry Debt in an Economic Downturn

economic downturn

Currently we are facing an economic downturn. In the final quarter of 2008 there were 1,991 debt agreements signed. According to ITSA this figure is up 37.12% on December 2007. This figure illustrates the increased number of Australians’ who are facing financial difficulty.

Carrying debt in a downturn can be more dangerous than ever. Predominantly people are getting themselves into financial difficulty through the use of credit cards and personal loans. According to Chris Riotto, Managing Director of Australian Lending Centre;

“In a downturn, it is more important than ever to seek debt advice. An increasing number of Australians are having to cope with a reduced income or unemployment, doing this with substantial debts can be particularly difficult, that is why I stress the importance of seeking advice at the earliest possible sign of trouble”.
Chris Riotto CEO ALC

A professional can assist you in sorting your financial troubles by analyzing your current situation, setting financial goals, and assisting you in achieving them. In some cases people may only need to cut back on their current expenses whilst others may need to look at debt solution products, either way, the sooner you get professional help the quicker and easier it will be to get your debts under control.

Assess your Debt in the Economic Downturn

Fido is currently advising consumer’s of the following:

“Ignoring debt problems will makes things worse. Interest will probably continue to be charged on top of the debt and any possessions secured against the debt (e.g. your car) may be repossessed and sold. Also, your credit rating is likely to be affected and you might be sued.”
Fido

It is often a good idea to question your financial situation, sooner rather than later. If you can answer yes to any of the below questions, it may be time for you to talk to a debt advisor.

Do your monthly expenditures exceed your monthly income?
Does your credit card balance feel like it never decreases?
Are you finding it difficult to save a regular monthly amount?
Do you need a loan to pay off your debts?
Have any of your creditors been in contact with you regarding the payment of your debts?

Readjusting your current spending patterns could significantly help to get you out of a poor financial situation. The Australian Lending Centre knows all about debt and have helped many Australians with financial problems. Australian Lending Centre provides a free, confidential service to all customers, call us on 1300 138 188. We offer effective debt management solutions to become debt-free.

Tags credit card debt, debt assistance, debt help, Debt Management, economic downturn, FIDO, ITSA

Debt Consolidation

Debt Management

Can I combine my home loan with my personal loan?

How will consolidation benefit my expenses?

Am I eligible for consolidation?

Is it better to pay my car loan in 30 years?

Should I consolidate if I have bad credit?

How can the equity in my home help?

Can you afford to pay the debt?

What is the primary purpose of the loan?

Can you manage to make the repayments?

How does your credit report look?