Throughout December 2017, as a nation we spent an accumulative estimated $30 billion dollar on credit cards. While many of us don’t want to be a statistic, the fact is that nearly half of us won’t be able to reply our Christmas spending within the interest free period (55 days).
If you are someone who overindulged during the holidays, here are some tips to help manage your Christmas Debt Hangover:
Pay off the most expensive debt first
Review your credit cards and look to do a budget. This might hurt at first, but the tools of www.moneysmart.govt.au/tools can help guide through and identity your current statement of financial position and where you want your goals to be in 6 and 12 months.
Repay and refinance into a separate loan secured against your mortgage
While we wouldn’t suggest just refinance and rolling into your mortgage (as you are then paying interest on the next 20 years on this!) lenders will allow you to secure a separate loan against your home, and with rates at a 60 year low (mid 3%’s) this is a very attractive option.
Check out Mortgage Express App to assist with your research
Review the interest rate and terms of your credit card
Look at options to transfer to a lower interest rate. All lenders offer ‘low rate’ card terms and will talk with you on transferring across. This can save you more than 10% on credit card interest
Transfer the balance to an interest free card
While this can be incredibly attractive, be careful not to fall into a trap of only paying the minimum, ultimately you need to repay the debt
Consider consolidating all debts into a personal loan
This will ensure a lower interest rate and a pathway to reduce and clear the debt. This way you know clearly your budgeting expense every month.
This is the natural time of year to review your financial position, and we do encourage this quarterly as we understand that rates and lifestyle positions can change. By involving a Mortgage Express broker, we can help formulate a plan for the year ahead, ease the burden and achieve those financial goals.
Disclaimer: While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge. Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Credit Ombudsman Services Ltd (COSL) | Member of Choice Aggregation Services.