Australia Cards and Unsecured Business Guides

If you, like many other Australians, are currently paying a number of different loans such as a home loan, car loan, a personal loan, credit cards, and store cards each and every month, you are probably paying interest on accumulating debt whilst trying to juggle the different days that these payments are being deducted.

How would you like get your finances back in order and enjoy the great savings in the process?

How would you like to significantly cut your repayment obligations? No matter how many loans you may have or in some cases, even if you’ve had some credit history problems?

If you are a homeowner with equity in your home, you may be able to consolidate all your existing obligations into your mortgage. This is sometimes known as an All-In-One loan or as I would like to call it the “Equity Loan Access Variable”.

Firstly, all your outstanding bills and debts are repaid in one go, avoiding possible future defaults on your credit history. This will then allow you to budget much more favorably per month on one commitment, therefore allowing you to make only one monthly payment rather then the usual 4 or 5 different scheduled payments to deal with. Just the stress that is taken away from over budgeting is worth its weight in gold!

Even if your credit history is already less than perfect, equity secured debt consolidation loan may help to assist in the process of personal Credit Repair as you get back on track.

Through debt consolidation you may have the opportunity to pay home loan interest on your credit card and personal loan debt – this is very advantageous. Home loan rates are generally lower than those of credit cards, personal loans, car loans or overdrafts. Your home equity loan, in most cases, can provide the cheapest and most flexible source of finance that is readily available.

A professional mortgage broker can provide you with the correct equity debt consolidation loan so that you can use your immediate equity to manage your personal finance.

The future potential financial savings will be a positive step forward.

Australian Mortgage Centre

http://www.aussiemortgagecentre.com.au

The market for debit cards in Australia is certainly a growing one and it’s no surprise. Until recently Australians could only access debit cards in the form of the local EFTPOS system. While this has high acceptance in retailers in Australia it cannot be used over the phone, online or overseas. With many banks now offering Visa debit cards with the same acceptance as Visa credit cards the debit card is back in fashion. Another reason for there rise in popularity is the desire to avoid debt due to the global economic slowdown.

Most debit style cards are associated with the major credit card brands. This type of card has the logo of the bank or issuer plus the Visa or Mastercard symbol and is called a scheme debit card. Thus consumers can find Visa debit cards as well as MasterCard debit cards. There are many major banks, credit unions and building societies that issue Visa debit branded cards while only a few banks issue MasterCard. Visa debit thus have the biggest market share by far in the debit cards Australia industry.

Debit cards work and look like credit cards. However, they do not provide a line of credit; instead they provide instant access to the cardholder’s deposit account. The working principle is thus ‘buy now, pay now’ instead of ‘buy now, pay later.’ By using debit over credit Australia’s consumers avoid falling into excessive — and expensive — credit card debt.

Here’s how Visa debit and similar debit cards can help you avoid debt:

* The biggest advantage of debit cards from a financial perspective is that they do not attract any interest charges. Remember you are using your own money, not the card issuer’s credit. It’s possible to avoid expensive interest repayments if you pay for everyday items with a debit card.

* Another benefit derived from using debit is that they are not susceptible to the charges that make it expensive to credit cards, such as late payment fees, over-the-credit-limit fees, penalties, and other charges.

* Debit cards promote a kind of financial discipline. As the cardholder, the amount of spending possible on the debit card is limited to the amount of cash available in your deposit account.

* It could be argued that debit cards have higher security than credit cards as a PIN number is required for each payment.

On the other hand, there are some things to watch out for when using Visa debit and the like. These things don’t have to lead to you going into debt but it could result in some red-faced moments if your card is declined or expensive fees on your account.

* Debit cards allow you to pay for items directly from the money in your deposit account as soon as you put the payment through.

* You may have more difficulty keeping track of the balance in your deposit account. If you put through too many debit transactions without keeping track of your account balance then you run the risk of going into an overdraft. That could subject you to penalty fees or even attract interest.

* The bank may charge a fee of around 12 cents for each transaction. This could build up if you use the debit card often.

* Unlike EFTPOS, Visa debit may be used online and overseas. However, there may be shopkeepers who refuse to accept debit cards because they prefer cash or EFTPOS. Moreover, pressing “CREDIT” after the debit card is swiped could cause the shopkeeper to impose a 2% surcharge. If you press “SAVINGS/CHEQUE” to avoid the surcharge, the bank may charge the transaction fee. Either way, you pay a bit more and you might forget to account for the deduction to your account.

Debt problems come in all shapes and sizes from the occasional cash flow crisis to the full on, out of control, debt nightmare that requires professional debt advice.

For Australians experiencing short term debt problems a number of easy steps are open to them.

1 One of the simplest and best debt advice tips is drawing up a budget and sticking to it so that it’s easy to see what money is coming in and what’s heading out.

2 Most consumers’ wallets contain credit and store cards that they have had for some years. As consumers get older their credit score often improves with age, meaning they could be eligible for cheaper credit cards and could save money if they switched lender. It is possible to switch away hundreds of dollars of credit card interest this way.

3 Getting a list of standing orders and direct debits from your bank is a good way of spotting non-essential outgoings that could be put to better use.

4 Interest free loan and buy now pay later deals are often expensive and designed to part consumers from their hard earned cash. It is best to avoid these deals, and only buy what you can pay in cash for.

5 Pay more than the minimum monthly payments on all credit cards, otherwise you will be paying more than you need to in interest payments.

6 If you have a home loan, think about refinancing. If you do your sums carefully you could save money on an introductory cheap rate.

For consumers who are facing more than short term debt problems a number of alternative steps are available.

7 Think about consolidating all credit and store card debt into one loan. Average loan rates are significantly less than those for average credit and store cards. Applying for two smaller loans, rather than one large one, can make it easier to get your loan accepted.

8 Don’t extend any loan for more than 3 or 4 years, doing so can make the total cost of the loan much more expensive, for just small monthly savings.

9 Consumers with consumer credit insurance should consider cancelling it, as it not good value for money. It was highlighted as a ‘junk insurance’ by the Australian Consumer’s Association. CCI adds a considerable amount to the monthly cost of credit, and it won’t give any advantage to a credit application.

10 Consumers with a mortgage could think about re-mortgaging and consolidate their credit or store card debts into their mortgage, at a lower rate of interest.

11 Consumers struggling with their debt need to prioritise their monthly payments, to ensure that the essentials are paid first. Failure to pay the mortgage, secured loan or rent can lead to homelessness, so it’s always important to pay these first. Don’t pay the lender that shouts the loudest first.

12 There are government funded independent financial counsellors in all parts of Australia. They can give consumers free expert debt advice. Consumers who need to deal with their creditors to reduce their payments can get help with an Informal Arrangement through their local free financial counsellor.

13 If a consumer’s debt problems have become a real horror story, there are a number of options to relieve the stress and burden and achieve a fresh start.

14 Bankruptcy is an option for those who cannot see any way of repaying their debts. For $400 it wipes the slate clean. Creditors are no longer able to pursue a customer who has been declared bankrupt, and the consumer will be discharged after three years.

The downside of bankruptcy is that it remains on a consumer’s credit file for seven years. Their assets, which could include their home, will be sold off by a Registered Trustee or the Insolvency and Trustee Service. A contribution is taken from bankrupts who earn over a certain level, currently around $40,000, to pay their creditors.

15 An alternative to formal bankruptcy is a Debt Agreement, targeted at people on low incomes with few assets. This can reduce the amount consumers owe to their creditors by agreeing a compromise deal. Debt Agreements tend to be used by consumers struggling with their credit cards or loan payments, and who earn less than $58,000 after tax. These can be administered by Registered Trustees, ITSA or a third party. Service fees can be around 20%. As long as 75% of creditors agree, a formal Debt Agreement is binding on creditors.

16 A more expensive alternative to a Debt Agreement is a Personal Insolvency Agreement. These are open to more consumers, but can be more expensive because they can only be administered by a Registered Trustee or ITSA. Both Debt Agreements and Personal Insolvency Agreements appear on credit reports for 7 years.

17 For more debt advice information, check out the debt advice published by the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission entitled: “Dealing with debt: Your rights and responsibilities.”

Description: Many more Australians are in need of good debt advice since the onset of the credit crunch. This article contains top tips for people facing a cashflow crisis to those in need of hitting the financial reset button.