In January 2014 I blogged about tackling your credit card debt and now Mortgage Choice’s inaugural Money Survey* has revealed that around 5 out of 10 people in SA worried and/or concerned about their overall financial situation.
The outcome is disappointing, but not surprising, given that 53.7% of those surveyed have credit card debt. The survey found that nearly 4 out of 10 people owe more than $5,000 and about 1 of out those 10 owe between $4,000 and $5,000 on their cards. Meanwhile just over 1 in 10 owe as little as $500 or less.
It is worrying that a high proportion have significant credit card debt, especially when so many make the minimum payments each month instead of trying to pay their card in full. Many people still don’t realize, or choose to ignore the fact, that making the minimum repayment can hurt them financially over time.
Think about this, say you owe $5,000 at an interest rate of 14% and continue to make the minimum payments each month. Continuing with this behavior will result in you taking 21 years and 11 months to pay off the debt and even worse you have spent $11,000** paying off $5,000.
If your credit card behavior is out of control read my previous blog on how to take action.
Other financial management alternatives include:
- Debt consolidation: This can help you reduce interest and make your entire financial situation more manageable. Money saved on 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? 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: Health insurance premiums will rise in April this year, so how about reviewing what you pay and what it provides? Are you paying for features you don’t need? Or you may find a cheaper policy elsewhere? Comparison sites like www.helpmechoose.com.au can help you find a policy that is best suited to your needs and save you money in the process.
- Home loan health check: Interest rates are low and and lenders are competing for your business. Julie Browne your local mortgage broker can give you a home loan health check to see if there is a better product out there for you and at the same time review or look at opportunities to consolidate debt. The service is free and available to you 7 days a week.
Should you review your financial situation? Call Julie Browne on 0421 206 543 or 8269 6887 or email Julie.email@example.com
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*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