Credit Cards

Credit cards can be a valuable tool in the right person’s hands.  What do I mean by the right person?  I am referring to a cardholder with the discipline and the ability to repay the outstanding balance in full each and every month.  Many banks offer a credit card as part of a home loan package and this can be used to maximise the benefits of your offset account eg: if you spend say $4000pm on your card and repay the balance in full each month, you will have paid no interest but more importantly the $4000 sitting in your offset account is saving you interest on your home loan pending payment of the credit card.  An additional fringe benefit may be the accrual of frequent flyer or rewards points but this is a secondary consideration only.

Whenever a client asks me what’s the interest rate on the new credit card, warning bells go off.  My usual response is “what do you care?”.  This may sound flippant or even harsh but my point is that if you are paying off the credit card in full each month, the rate is irrelevant and if you don’t pay it off each month then either you can’t afford it or you are slack.  Either way, you shouldn’t have a credit card relying instead on a mastercard debit card so that you only spend what you do have and not what you don’t have.

Christmas has just been and gone and we understand that it can be a financially testing time of the year.  If you have accrued credit card debt over the festive season that you are now unable to repay, please contact us to see how we might be able to help.