Pay off your credit card each week 'and get free money'
Pay off your credit card each week 'and get free money'
Paying off a credit card each week is like having free money from the bank, it has been suggested.
People should make sure they pay off their credit card each month and get free money.
This is the advice of Karina Barrymore, writing for the Herald Sun, who stated people should "join the nerd brigade" like her and save themselves a lot of hassle and expense by clearing their Aussie credit product regularly.
She said after making the mistake of not paying off her card once and being charged with a big interest payment she did not make the same mistake again.
"If you're a nerd like me and pay off your card every month then the card company and bank don't make any money from you. In effect, you get to use their money for free," Ms Barrymore stated.
Those keen to put her advice into action might be interested to hear the government has proposed a ban on late fees as part of its credit and banking reforms, as well as more of an explanation about how interest is calculated.
It is also hoping to ensure repayments on all credit cards take off the highest interest first, rather than the lowest to stop people in arrears getting even further into debt.
Ms Barrymore pointed out: "At the moment when someone makes a part repayment against their credit card bill, the banks offset it against the portion of debt that has the lowest interest rate."
But she noted there will be strong opposition to these proposals from the banks and credit card companies.
Those looking for help budgeting might also be interested in comments from Mirsad Hasic, writing for Homepage Daily, who recommended people should make a list of income and outcome, such as household expenses, insurance and mortgage costs from the last three months.
And they can then divide both sections by three and work out where their money is going on average.
Virgin has joined Barclaycard in increasing its 0% balance transfer period to the longest duration ever offered on a credit card.
Previously, Virgin was know for staying ahead of its competitors by offering its customers the longest deals.
But recently Barclaycard stepped up the game, setting a new standard for other providers and it wasn't long before Virgin credit cards followed suit.
This is great news for anyone that currently pays interest on their credit card balance, as by transferring the debt to either credit cards mentioned above, will effectively allow them to freeze any further interest payments for up to 18 months.
Experts now expect other credit card providers to follow by boosting their deals, giving consumers more choice.
As with all credit cards, there is a small transfer fee 2.90% for the Barclaycard Platinum and 2.89% for the Virgin credit card, which is applied to the total amount transferred then added onto the balance.
An effective way of clearing outstanding debt is to set up a payment plan to ensure the balance is paid off in full within the 18 month interest free period.
For example, if you owe 2,000 on your current card and plan to transfer this to the Virgin card (includes a transfer fee of 57.80), you would divide the total by the number of 0% months offered and pay this each month - in this case you could be debt free within 18 months by paying off 114.32 per month.
This can be extremely useful for minimising the amount you would pay in interest, saving you years of unnecessary payments.
Something to always keep in mind when using any credit card is to ensure you always pay off at least the minimum monthly balance. Failure to do so could result in penalty fees and in some cases can affect the terms of the card and even have a negative impact on your credit history.
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