Have you got credit card debt that you are struggling to pay off? If so, you are not alone.
According to Mortgage Choice’s inaugural Money Survey, 36.6% of people residing in New South Wales owe more than $5,000 on their credit card. Further, a large percentage of those with credit card debt have admitted to just making the ‘minimum repayment’ each month in a bid to pay off their debt.
While it sounds like a good idea to meet your lender’s ‘minimum repayment’ expectations, the reality is somewhat different. For those who only make the minimum repayment each month on their credit card, you may not realise it, but this could hurt you financially over the longer term.
As an example, say you owe $5,000 on your credit card which has an interest rate of 14%. Now, if you were to make the ‘minimum repayment’ each month, it will actually take you 21 years and 11 months to pay off your credit card! Further, you will have spent almost $11,000 paying off $5,000 of debt.*
If you are one of the many Australians who have fallen victim to making the minimum repayments on your credit card each month because you cannot afford to pay any more, don’t despair. There are a few things you can do to help you reduce your debt, including:
· Debt consolidation: We can help you consolidate your credit card debt, car loans, personal loans and other debt into your mortgage. Consolidating your debts can help you not only reduce the amount of interest you are paying but make your entire financial situation more manageable – saving you time and money in the process. The money you then save on your short term debts can be filtered back into your mortgage to help you pay it off faster.
· Debt refinancing: Do you have a car loan that you are trying furiously to pay off? At North Sydney Broker we can have a look at your current car loan and see if there is a product on the market that is sharper priced and better suited to your ongoing needs. If there is, we can then help you to refinance into the better product, saving you money and the hassle of doing it yourself.
· Review your budget: If you are struggling to meet your various financial obligations each month, you may find that you are living outside of your means. Having a budget will help you to identify where you are spending your money and show you areas where you may be able to cut back.
And finally remember, you are not alone and we can help you review your current financial situation and work with you to put a savings plan/budget in place so that you can find it easier to meet your financial obligations moving forward.