March 18, 2014
Mortgage Choice provides top savings tips to reduce debt.
A majority of Queenslanders are concerned about their current financial situation, according to new research.
New findings from Mortgage Choice’s inaugural Money Survey* found 58.3% of Queenslanders were either “very worried” or “concerned” about their financial situation.
This statistic was unsurprising given 59.2% of Queenslanders currently owe money on their credit card.
“The Money Survey found that of those with credit card debt, 32% currently owe more than $5,000, while a further 9.8% owe between $4,000 and $5,000 on their credit card,”
“Meanwhile, just 9.8% currently owe $500 or less.”
It was worrying to see so many Queenslanders owing significant debt on their credit card, especially when so many will only make the minimum repayments each month rather than paying off their credit card debt in full.
“People often don’t realise that only making the minimum repayments each month on their credit card can actually hurt them financially over the longer term,”
“For example, say you currently owe $5,000 on your credit card which has an interest rate of 14%. If you didn’t charge anything else to the card and made the minimum repayments each month, it will take you 21 years and 11 months to pay off your credit card. Worse still, you will have spent almost $11,000 paying off $5,000 of debt**.”
If you are concerned about your current financial situation and are only making the minimum repayments on your credit card each month, don’t despair. There are a few things you can do to help get yourself back on the path to financial freedom.
Debt consolidation: Consolidating your debts can help you not only reduce the amount of interest you are paying but make your entire financial situation more manageable – saving you time and money in the process. The money you then save on your short term debts can be filtered back into your mortgage to help you pay it off faster.
Debt refinancing: Do you have a car or personal loan that you are trying furiously to pay off? With interest rates low, now is the perfect time to have a look at your current car/personal loan and see if there is a product on the market that is sharper priced and better suited to your ongoing needs.
Use comparison sites: With health insurance premiums set to rise in April this year, there really is no better time to review your current health insurance policy. By reviewing your health insurance policy, you may find that you have not only been paying for extras you don’t need, but you may also find there is a cheaper policy that is better suited to your needs both now and into the future. Comparison sites like can help you find a policy that is best suited to your needs and save you money in the process.
Go for debit not debt: Credit card interest rates have long been notoriously high. And, constant use without complete payment at the end of the month can lead to significant debt. Make paying off your credit card a priority, then cancel it and try using a debit card instead. Debit cards have lower interest rates than credit cards, provide a similar level of protection when buying online and will stop you from spending money you don’t have.
Home loan health check: With interest rates hovering around record lows and Australia’s lenders actively competing for business, there may be another mortgage product on the market that is better priced and suited to your ongoing needs. A mortgage broker can give you a home loan a health check to see if there is a better product out there for you – saving you time and money. If you don’t have a home loan, try giving your financial situation a health check to see if there is money you can save elsewhere.
If you would like more savings tips or require further information on refinancing, home loan health checks or debt consolidation, call 5502 8906 or click on the 'contact us' tab at the top of the page.
*About the survey Market research company Nine Rewards was commissioned by Mortgage Choice to conduct the 2014 Money Survey. The online survey was conducted in late February 2014 and completed by 1,064 Australians from a range of financial backgrounds including first homeowner, next homeowner, homeowner and investor, investor only and not a mortgage holder. **Example calculated via the credit card calculator on the government’s Money Smart website: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/credit-card-calculator