Be Smart With Interest Rates
Posted May 27th, 2011
With credit card interest rates forecasted to go up once again tomorrow morning after the RBA will most likely hike theirs it is time we all embraced some smart money managing techniques to brace ourselves for future hikes.
The RBA has long warned us that for the state our economy is in right now usually interest rate levels would be set at around 5 or 6 per cent.
Currently sat at 3.25 per cent, our rates will undoubtedly go up… and up… and up even more.
Credit card interest rates will be no exemption:
In recent months we have already shown the rest of the world that we have become more credit savvy overall by switching to debit cards. It is also said that around a third of Australians have a mortgage of which most are ahead with their repayments. This is good news. It shows that we have learned from our past mistakes – or are in the process of doing so.
Even when we received the 4.25 per cent interest cut we chose to keep making our usual repayments to power ahead.
Analysts forecast that future interest hikes will affect the smaller portion of our communities – those people who already struggle with their finances and therefore might end up over-committing themselves with a mortgage.
Sydney and Melbourne consumers are set to suffer the most. Since the market values are the highest around those cities, so are the mortgages.
Higher rates better job market:
Signs of an improving economy are everywhere and it is highly likely that we see better stakes in our job market in months to come. However, despite the positive signs there is no reason for early jubilation.
Right now, it is best to pay off debt than trying to save money. You save ore money on an offset mortgage account that you earn with a high interest term deposit at present.
Credit savviness starts here:
Now would be a good time to shop around for a better interest rate on your credit card, especially if your credit rating is strong.
You should also pay attention to the following:
- Avoid hedge funds if possible unless you know what you get into.
- Be mindful of high geared company investments. Not everything that looks rosy is.
- Check whether negative gearing REALLY does work for you. Increased borrowing costs negate the positives of negative gearing.
- If your income is investment dependant, speak with your account how to best manage your portfolio.
Source: News.com.au
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Comparison of our Top Credit Card Offers
| Interest Rate (p.a.) | Balance Transfer Rate (p.a.) | Annual Fee | Cash Advance Rate (p.a.) | |||
|---|---|---|---|---|---|---|
Bankwest Breeze MasterCard | A low interest rate on everyday purchases with a low balance transfer offer | 0% for 6 months (reverts to 10.99% ) | 4.99% for 9 months | $49 | 21.99% |   |
Citibank Clear Platinum Card | A low interest rate offer on balance transfers and purchases | 11.99% | 0% for 12 months with 3% handling fee | $99 | 21.74% | |
St.George Vertigo | An introductory offer on balance transfer and a low annual fee | 13.24% | 0.99% for 6 months | $55 | 21.49% | |
Virgin Flyer Credit Card | Earn 1 velocity point per $1 spent, plus an introductory offer on balance transfers | 20.99% | 1.9% for 12 months | $50 (for first year thereafter $99) | 20.99% | |
Westpac 55 Day Credit Card | No annul fee for the first year with a low rate on balance transfers and purchases | 0% for 5 months (reverts to 19.59% ) | 3.99% for 6 months | $0 annual fee for the first year ($30 thereafter) | 21.49% | |
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