RateCity.com.au
Advertisement

Aussies recover with a balance transfer


Laine Gordon

By Laine Gordon

2 min read

After the Christmas period and the party season, many credit cards will have had a work out. But with a few simple tips, most Australians will be able to flick the financial hangover and start a clean slate for the New Year.

According to the latest credit card data from the Reserve Bank of Australia, balances accruing interest jumped up 0.54 percent to $194 million in October from September. Despite this, the nation’s collective credit card balance has been decreasing for four straight months – a first for cardholders since the RBA began reporting data in the 1980s.

So now that your interest free days are slipping away, what’s the best way to redeem your holiday splurge?

The trick to plugging your credit debt
By comparing and switching credit cards online, you can save hundreds for the next spree at year’s end. Popular methods to do this include consolidating several credit card debts into one, or applying for a balance transfer card to gain an interest rate reprieve.

There are a number of cards currently offering balance transfer rates below 3 percent. The risk with these types of cards, however, is that some revert to above-average interest rates following the ‘honeymoon’ period. Failing to repay by the debt of the low-interest period can be costly. It’s also worth noting that the purchase rate on these cards may be higher than the balance transfer rate, so you’ll need to do your homework.

Another common mistake is upgrading your rewards program, which is natural for credit card users who think that it will help discount their rising spending habits. In reality, many of these programs offer rewards at the cost of higher interest rates, which in effect has you paying more for your own “discounts”.

This January, you may hear dozens of “wonder cures” for your credit card debt, but savvy Australians plan their own miracles by switching cards online and setting short-term goals to minimise their interest. Make this month count, and compare credit cards for the lowest rates today.

 

Advertisement

Contact a Broker

A broker will compare hundreds of home loans to help find the right deal for you, at no cost.

By submitting this form, I accept Loan Market's terms and conditions, privacy policy and Collection Statement for this service.

Yes, I'd like to get email updates from RateCity

Submit your details now and a local expert will be in touch within a few business hours. They'll compare hundreds of home loans from up to 20 lenders including the big banks to find the loan that's right for you. Book your free appointment today.

Loan Market Pty LTD | Australian Credit License 390222 ABN 89 105 230 019

Compare your product with the big 4 banks, or add more products to compare
Advertisement