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Comparing credit cards the right way can be rewarding, because there’s a credit card that can cater to almost every lifestyle and financial need.

When you compare, you’ll be looking at everything from interest rates, to reward programs to promotional offers to fees.

Compare credit cards by type of card

Since you probably already know that closing your accounts too often can hurt your credit score, we hope you’ll keep your card for some time. That’s why it’s important to choose the type of card that’s right for you – so you can enjoy its lifestyle benefits for time to come.

Here are the main types of cards:

• Reward credit cards. Cards that let you earn points you can redeem for gift vouchers, merchandise, travel, cash and more. These are great for people who pay off their credit card every month (so as to avoid interest).
• Frequent flyer credit cards. A type of rewards card that works with your airline’s frequent flyer programs to supercharge your points accumulation. These are great for people who fly a lot and who pay off their cards every month.
• Low-rate credit cards. Cards that charge a lower interest rate on purchases compared to most other cards. These are great for people who occasionally carry a balance, such as at Christmas time.
• No annual fee credit cards. Cards that don’t charge a yearly fee just to carry them. These are great for people who don’t use their card a lot or who keep their card mainly for emergencies.

Compare cards by interest rate and fees

Once you know what kind of card you want, you’ll want to find out how much it will cost you. Costs usually come from:

• Interest rate. The percentage your debt or balance will grow per year. Go for a lower interest rate if you think you’ll often carry a balance from one month to the next.
• Fees. These may include annual fees, cash advance fees, international transaction fees, additional cardholder fees and late payment fees. The fewer fees the better, although annual fees are sometimes unavoidable for certain types of cards like rewards cards.

Compare by the promotional offer

Depending on how you want to use the card, you may want to consider any introductory offer that comes with a credit card. Here are some of the most common:

• 0% purchase rate. These cards charge 0% interest on purchases for a limited time, such as 6 months or a year. This might be a good option if you plan to make a lot of purchases at once, such as at Christmas time or before a holiday, and could use a few months to pay it off.
• 0% balance transfer. These cards charge 0% interest, up to a certain amount and for a limited time, on existing debt you transfer over from other cards. These are good for people who want to consolidate debt from multiple cards and have a plan to pay it all off by the end of the promotional period.
• Extra rewards or points. Some rewards cards will offer extra rewards or points just for signing up. For example, a travel card or frequent flyer card could offer a free domestic flight or a rewards card could offer 10,000 free bonus points.
• Waived annual fees. Some cards will temporarily waive the annual fee, such as for the first year.

Compare credit cards by their perks

Many cards will come with additional perks that are also worth keeping your eye out for. These can include:

• Free travel and medical insurance
• 0% foreign transaction fees
• Airport lounge access
• Concierge services
• Purchase protection and extended warranty
• Retail partner discounts
• Hotel status credits
• Event tickets

Bottom line

Conducting your credit card comparison the right way is important for a number of reasons. It can keep you from paying too much for your card and it can ensure that you enjoy valued perks, rewards and lifestyle benefits on an ongoing basis.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

The post How to compare credit cards the right way appeared first on Credit Simple.

Here are a few tips to help you ring in the new decade with as little debt as possible.

1. Reconsider whom you need to shop for

At different points in our lives, it makes sense to shop for certain people and not for others. For example, when our nieces and nephews are young, gifts are appropriate but when they’re adults, maybe a heartfelt card is enough.

Go through your list and decide whom you really need to shop for and who can make do with a heartfelt holiday wish.

2. Set yourself a limit – and stick to it

Now that you know who you need to shop for, set yourself a budget based on what you can reasonably afford. Set aside one “money bucket” for gifts, remembering to factor in the cost of wrapping paper, tape, greeting cards and the like

Consider a separate money bucket for food, drinks and entertainment. This includes eating out, coffees, treats, parties, costumes and movie outings.

Once you have your budget, stick to it. The whole point is to spend only what you can afford to spend.

3. Consider what people actually need

It’s often the case that people don’t really need, or even want, new expensive gadgets in their lives. If you consider what each person really needs, you may uncover creative and inexpensive ways to fill their holidays with cheer.

Maybe you can surprise your nostalgic mother by transforming all your old childhood photos into a digital scrapbook, or give your achy partner a massage based on a technique you learned from YouTube.

4. Shop online

If you do end up with a few physical goods on your to-buy list, consider buying them online. Not only can you often find better deals, but you’re also less likely to incur unexpected or hidden expenses like petrol, parking, eating out, that special gift to yourself and all those pumpkin gingerbread lattes.

But online shops want your dough just as much as brick and mortar shops do, so make sure you don’t get sucked into all the online sales and marketing gimmicks.Make sure you shop around for the best deals and buy only what’s on your list.

5. Do a Secret Santa

Secret Santas aren’t just for the office and the school yard; they’re great for families too. So if you really want to save money this holiday season, and help others do the same, consider a great big Secret Santa.

Ask everyone to write down their name on a slip of paper, along with two or three items they need (or they can simply write “surprise me!”) and throw those into a hat. This way, everyone can save a little money and no one is left with a useless gift they’ll just toss later.

6. Go potluck

There’s nothing wrong with wanting to entertain guests at your home over Christmas or New Year’s Eve. However, there’s no reason to splurge on all the food yourself. If you decide to throw a party, go ahead and cook a couple of your specialty dishes, but ask all your guests to bring something too.

7. Spend New Years in

You don’t need us to tell you how expensive it can be to pay for food, drinks and cover charges just to attend a fancy New Year’s party. Why not hang some mistletoe at home and have your party there?

You won’t have to put up with obnoxious strangers and you won’t have to stand on milk crates to see the fireworks on your big screen and most importantly food and drinks will be a fraction of the price.

Eat, save and be merry!

With some foresight and a little self-control, you can get through these holidays without burying yourself into a pile of debt you’d otherwise spend the next year digging yourself out of.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

The post 7 ways to save money this holiday season appeared first on Credit Simple.

Just as we hoped, Comprehensive Credit Reporting (CCR) has improved the credit scores of millions of Aussies.

Late last month, the Big Four banks shared the remaining 50% of lending data with the credit bureaus, marking the biggest milestone in the history of the new reporting regime.

Literally overnight, nearly half of all Aussies using Credit Simple received an improved credit score.

What is Comprehensive Credit Reporting?

CCR is a reporting scheme that takes all of a borrower’s credit history into account, both good and bad.

Prior to this, lenders were only sharing the bad stuff with the credit bureaus: things like late payments, defaults and making too many loan applications.

Now the bureaus see more of the good stuff, like on-time payments and accounts in good standing.

For that reason, this type of reporting is sometimes called positive credit reporting.

Most other developed countries have been using positive reporting systems for quite some time, so it’s a welcome change Down Under.

Has it helped?

Initial results seem to suggest that positive credit reporting lives up to its name. In fact, nearly half of Credit Simple users saw their credit scores increase – by an average of 27 points on the 1,000-point illion scale.

On the flip side, nearly 30% saw their scores decrease – by an average of 53 points.

26% saw no changes to their score.

What should you do if your score changed?

CCR offers a number of opportunities for you to improve your financial situation, whether your score increased or decreased.

If your score increased

If your score increased, you should immediately try to take advantage of your good fortune. The number one way you can do that is by negotiating better rates with your lenders.

Our research shows that homeowners positively affected by the new scheme could save 0.5% p.a. off their current mortgage rates, which for a $373K home loan (the national average), works out to be a saving of $112 per month or $40,000 over 25 years.

With a higher score and more transparency into your credit file, you can now walk into such negotiations on the front foot.

If your score decreased

There’s still plenty to be positive about even if your score went down. For one thing, you now have more transparency into why it went down. The comprehensive nature of the new scheme means there’s more information on your credit file – information that you can easily access and view using a tool like Credit Simple.

With all this information at your fingertips, here are some steps you can take to improve your score:

• Look closely at your credit history. Log into Credit Simple or request your credit history from one of the bureaus. If you see a late payment you totally forgot about, pay it as soon as you can. If you see any negative events you don’t recognise, alert the credit bureau and your lender. With Credit Simple, you can alert us right there in the tool.
• Set up direct debit. Paying on time used to not account for much, at least as far as your credit score went. Now you’re rewarded for it with a higher score. Set it and forget it using direct debits and watch your score climb over time.
• Keep a healthy amount of debt. Your credit score and credit history are important because they show how well you can handle debt. That means you have to have some debt in the first place. If it’s within your means, consider getting a simple, low cost credit card if your credit history is bare.
• Have birthdays. Demographics also play into your score. As you age, you get the advantage of being identified with a group of people widely considered to be good borrowers. As long as you don’t make a lot of financial mistakes, your score should increase as the years go by.

The information in this blog post is general in nature and does not constitute personal financial or professional advice. It is not intended to address the circumstances of any particular individual. We do not guarantee the accuracy and completeness of the information and you should not rely on it. Before making any decisions, it is important for you to consider your personal situation, make independent enquiries and seek appropriate tax, legal and other professional advice.

The post Comprehensive Credit Reporting is a boon for Australians appeared first on Credit Simple.

Up to 6 million Australians could save up to $40,000 over the life of an average 25-year mortgage, following the introduction of new laws by the Australian Government, according to consumer advocate group www.creditsimple.com.au.

The introduction of Comprehensive Credit Reporting (CCR) means Australian banks are about to load millions of records with the credit bureaux, and lenders will now be able to see the positive records of the country’s 6.4 million home owners for the first time.

www.creditsimple.com.au CEO David Scognamiglio said the introduction of millions of new consumer spending records will generally see credit scores improve.  

“Until the introduction of CCR in 2014, banks could only judge how much to lend to home buyers based on their ‘negative’ credit score – for things like defaulting on their credit card – which gave an unclear picture on what they could actually afford to borrow.

“Good qualities like paying their credit card or car loan on time were never included, he said.

Registries like illion would now house the new data, allowing up to 90 percent of home-owners to qualify for better mortgage deals.

“Home-owners may be able to get up to 0.5% off their current mortgage rate once their positive credit history is included on their credit record.

“For the average $372,902 home loan, that works out to be a saving of $112 per month, or $40,000 over 25 years.

“Better data gets you better deals, with some of the lowest in the market now being offered at 3.2%.  A lot of people have a 4 in front of their mortgage now, when they should see a 3, and in some cases even a 2.

“Until now, your bank has held all your positive credit or payment information. Under the new system, that information will be held by the credit bureau and shared with other lenders, encouraging new entrants into the market and breeding more competition,” he said.

Mr Scognamiglio noted the system would also help protect more vulnerable consumers as more data also helped the Banks know when not to lend.

“It is more important than ever to make sure you pay your loans on time – missed payments will make your score go down.

“A good score means you are a valuable commodity to a bank.

“Banks will see you are a great payer even if your history is with another bank. That’s a game changer, and will breed new competition into the market, which means rates will get better.

“You should get a better rate if you have a good score, and you should use it as an opportunity to get a better rate,” he concluded.

To obtain your free credit score and report, visit www.creditsimple.com.au

For media enquiries contact Apollo Communications on (02) 9660 4995 or after hours on 0417 170 084.

The post Six million homeowners could get a better mortgage appeared first on Credit Simple.

You don’t get much in this life unless you ask. That’s definitely the case with your bank, your insurance company and utility companies. There’s a lot of money to be made there. And if we’re lazy, companies can maximise their profits.

Don’t let that be you. By playing hard to get, or by ‘rate tarting’ (that’s shopping around for a better rate), you can have your loyalty rewarded.

Understand your spending

Before you storm into your bank or phone your insurance company, take time to work out how much you’re spending now and the number and nature of the units/calls/fees that go to make up your bill.

Perhaps you’re making numerous nationwide phone calls or eating up too many megabytes a month on your broadband plan and a prepay deal could save you heaps.  

Compare and contrast

Once you know what you’re spending a month, how many kilowatts of energy you use, what the interest rate is on your savings and all the other data, you can get your mouse out and compare your current deal.

Shopping around is made easy with comparison sites for lots of different things. If there’s no such site, then open a spreadsheet or get good old fashioned pen and paper out to do the comparison yourself.  

If there’s a new kid in town that’s advertising everywhere consider calling, or getting a quote online and see if you could do better. Sometimes their deals simply can’t be beaten.  

Ask for a better deal

Now it’s time to pick up the phone and call your provider to see what they can do to keep your loyalty. “Can you give me a discount?” or “that’s too expensive” are very powerful words in the English language. Remember it costs them a lot more to gain a new customer than keep you. So try your luck.

There’s one really important rule when playing this game: that’s never be rude if you want a better deal. Call centre staff are human and will be motivated to help you if you’re polite.  

If the call centre operator doesn’t have the authority to give you a discount ask if the supervisor has the discretion to give you a discount?” you might just be successful.

Find out if there are other ways to save

If your existing supplier can’t or won’t give you a discount, then move onto Plan B. That’s asking them for other ways to cut your bill.

These companies release new plans and accounts all the time and they can analyse your existing spending and find the best deal for your personal circumstances.

It may be that there’s a new bank account available with reduced fees or your accounts can be reorganised to stop you being pinged with honour and dishonour fees.

Be careful, however, that you read and understand the fine print. Does the new insurance policy you’re being offered have the same cover as the last or are you agreeing to a new fixed term contract that you can’t break?

If all else fails: walk

Sometimes you just need to vote with your feet. If the opposition is offering a better deal and you’re sure you’re comparing apples with apples, then move.  Hopefully your new supplier will value your new-found loyalty.

Do it all again

If you really want to win at this game, make a diary note to do it all again in 12 or 18 months time. Chances are there are better deals around again.

The post Does it pay to be a loyal customer? appeared first on Credit Simple.

Watch out! Your credit score could soon affect the interest rate you pay. That’s good if you’re a “unicorn” with a credit score from 801 to 1,000, and not bad if you’re a “thoroughbred” with a score of 601 to 800.

If, however, you’re a credit “donkey” at the very bottom of the credit score pile, a credit pony at 201 to 400, or a farm horse from 401 to 600 you could well pay more.

Why “donkeys” pay more thanks to their credit score

That’s because Australia lenders will soon be adopting a new style of “risk-based pricing”. That means they offer different rates to customers depending on how bankable you are as a borrower. At the moment you’re offered the same rate whether you’re head and shoulders better than other borrowers or someone who has a pretty average record. Here’s what you need to know:

• It’s new. Risk-based pricing is new in Australia. In the past “negative” credit scoring only measured you on your defaults. As “positive credit reporting” becomes more common your payment history will be taken into account. The data enables lenders to make better judgements about whether we’re more likely to pay or default.
• Who’s offering it? Peer-to-peer lenders such as RateSetter and SocietyOne do this already, says Steve Brown, director of bureau engagement at illion, Credit Simple’s parent company. They rate you  from A-E according to your credit score. It’s very much the norm now globally for banks to price according to credit scores as well. We’re playing catch-up here in Australia. 
• Why do it? Risk-based pricing is starting to happen over the ditch in New Zealand. Lenders want to attract the best borrowers who they know will pay the loan back without being chased. By offering lower rates to the unicorns and thoroughbreds banks and other lenders reduce their risk. It’s also a marketing tool to attract better customers.
• What about mortgages? Sooner or later you’ll be offered mortgage rates based on your credit score, says Brown. It already happens informally. Banks are sometimes willing to knock a few points off their mortgage rates to gain or keep a good customer. Conversely, borrowers whose bills get in the way sometimes have to go to second tier lenders such as finance companies to get a mortgage at all. Typically the rates will be higher than banks offer.
• Wait, but my credit score sucks. As with mortgages, there is already an informal system that means borrowers pay more if they’re swimming in debt. Aussies with really poor credit scores may not be able to borrow from the bank or credit union at reasonable rates and be forced to go cap in hand to finance companies. For the very worst credit scores the only choice may be payday lenders that charge much higher interest rates.

Never fear. Credit Simple is here with some good advice even if you’ve sabotaged your own credit score. You can get yourself ready for risk -based interest rates by cleaning up your credit score now.

How to get better loan pricing

Start by checking your credit record by ordering your report from all four agencies: illion, Experian, Equifax, and the Tasmanian Collection Service. Go through your report with a fine tooth comb. If you think any entries are incorrect or unfair, contact the bank, finance company, or other credit provider such as utility companies  and ask for them to remove these.

The next step to cleaning your credit record is to pay off any debts that have led to defaults. Ask the credit provider to remove the default once you have.

Finally, start paying each and every bill on time including your rent if you’re a tenant. If you need to start budgeting, ensure this happens. Every single payment is a positive mark on your credit record and soon you’ll be moving out of donkey territory and becoming altogether more desirable to lenders.

The post How your credit score affects the interest rates you pay: Welcome to the brave new world of risk-based pricing appeared first on Credit Simple.

Step One: Spend money you don’t have

First of all, you probably want to spend lots of money. More money, in fact, than you’ve got in the bank.

Let’s say you’ve got a good job and you’ve found a place to rent in the Sydney or Melbourne market and you’re happy with your lifestyle. Why not crank it up to the next level by moving out of your flat, buying a bigger car on HP and maybe going on that overseas’ holiday. You know, the one you can’t afford. It’s OK because that’s what credit cards are for, right? Get some new luggage, and hit the road for the highlife. Don’t worry about paying off the card, get another card and use that to sort out the first card and you’ll be away laughing. Sure you’ll be paying for it later, but that’s what Tomorrow You has to worry about, right? Live for the moment.

Step Two: Spend money on things you don’t need

Have a think about buying some more stuff while it’s on sale. If you’re going on holiday, don’t forget to buy lots of things you just can’t get back home. OMG did I tell you the trick about taking a suitcase inside a bigger suitcase so you’ve got two for the return trip? Guaranteed winner every time.

Also, if you have more stuff than you’ve got space, get yourself a lock-up container to store your extra couches, beds, dressers, dining room tables and exercise gear in because one day you might need that extra furniture and hey, it’s only money, right?

Step Three: Join the gym

And get a wine club membership and subscribe to some online services that automatically renew every month or year and which you hardly use and get pay TV and never check your mobile phone bill or your electricity bill to see if you could get a better deal. Just don’t worry about that stuff. You’ll be happier not paying attention.

Step Four: It’s all too hard

Remember, you’ve probably got 20 or 30 years to go before you retire so you’ve got heaps of time left to sort that out.  Or if you’re already in your 40s and saddled with a mortgage and car repayments and those credit card interest rates it’s still OK. You can just say it’s all too late and there’s no point starting now. After all, a little bit goes a long way when you’re old and surely the government won’t let you starve, right?

Step Five: I don’t really need to retire anyway

And let’s not forget, you probably won’t get to retire anyway, the government won’t let you. It’s all ages away so you’re sure they’ll have it all figured out by then and besides, your great uncle told you once that he hated retirement and missed going to work every day so y’know, this is the perfect excuse not to retire. Instead, you can always get a second job and deliver pizza or something like that in the evenings. Yeah, that’ll be fun.

Anyway, retirement planning is boring and it’s a long way away and I’m having far too much fun spending money now so let’s not look too closely at that bank statement, OK?

The post Five ways to screw up your retirement: a lifelong project appeared first on Credit Simple.

Saving money doesn’t mean saying no to dinner dates. It’s totally do-able to dine out without spending big.

Here are eight tips to spending small when dining out:

1. Avoid share plates.

It’s hip to share, right? Well, not when it comes to your wallet. If you’re eating out with a group and everyone is sharing food tapas-style, it’s all too easy to blow out your budget. Those delicious dishes at $15 a pop may seem like a small amount, but the final bill can leave you hyperventilating in your seat. Try to steer the group to eat at a restaurant where everyone can order their own meals, and then you’ll always know what to expect.

2. Cut costs with coupons.

Gone are the days when coupons were cringe-worthy. These days, thanks to Groupon, Cudo, dimmi and endless other reputable discount websites and apps, there are countless offers at top restaurants to choose from. When you’re planning your next meal, simply jump online first to secure a deal.

3. B.Y.O.

Bringing your own bottle of plonk is destined to save you dollars. Make sure you check the corkage cost, though – some restaurants will charge up to $10 a bottle.

4. Make it a market date.

Want a fun date experience without the price tag? Head to one of the many night markets popping up in a region near you, such as Sydney’s Hyde Park night markets or South Melbourne’s night markets. Grab some fresh local food and eat out under the stars – what could be more romantic?

5. Pub grub.

You can’t beat a good old steak-and-chips or burger-with-the-lot. Most pubs offer a cheap eats night mid-week, and you can find a steak dinner for as little as $10.

6. Feed the kids at home.

It doesn’t matter how creative the Kids Menu is; more often than not, kids will end up pushing food around their plate like a Thomas The Tank Engine railway set. To save money – and avoid the arguments – feed the kids at home before you head out to eat. Then, buy them dessert while you and your partner savour your meal.

7. Ditch the water (and wine).

Order tap water instead of sparkling or still. And consider not drinking alcohol at all with dinner (gasp!) – then, all you’ll pay for is your meal.

8. Sign up and save.

Restaurants often give incentives to sign up to their newsletters, like discounts or freebies. Even the top restaurants will email you with specials from time-to-time, and offer you a free meal on your birthday. Happy birthday, indeed!

The post Eight ways to dine out on a budget appeared first on Credit Simple.

Living life large while on holiday doesn’t mean blowing your budget. It’s possible to enjoy every minute of your well-deserved break and possibly come home with cash to spare.

Here are our tips to travelling well while spending less:

1. Package it up

There was a time when the phrase ‘package deal’ made us think of budget airlines, cramped hotel rooms and noisy, sunburnt tourists. Now, thanks to companies like Luxury Escapes, it’s easy to nab a great deal to an even greater location. To save money while you’re away, look for deals that include food, pampering, activities and transfers. A word of caution: if you don’t have an all- inclusive deal, research the hotel and make sure that the dining options suit your budget. There’s no point in paying a cheap rate for a room if you’re only going to spend the equivalent on food every day.

Save: $$$$$

2. Set a budget

It sounds obvious, but set a budget before you go on holiday. Factor in things like food, alcohol, activities, travel (including hotel transfers), souvenirs, gifts and duty-free. Give yourself something like a 10% buffer so that you don’t feel the pinch if you go over. If you stick to your budget, that extra 10% or so will feel like extra money in your wallet – and you can treat yourself to a post- holiday massage as a reward.

Save: $$$

3. Get a travel money card

No one wants to come home from holiday to unexpected bank fees. Before you travel overseas, check with your bank to find out what charges you may be up for. Or consider getting a travel card. They are usually accepted everywhere a credit or debit card is accepted and you load them up with cash before you go so you can only spend what is on the card. The perks are, you avoid substantial bank fees and you can set the budget you want to stick to.

Save: $

4. Dine out

What better way to experience a new destination than to taste local food? Skip expensive hotel restaurants and head out to some local restaurants. Ask around for recommendations – and don’t just ask fellow tourists. Chat to some locals for the down-low on where to go for great cheap eats.

Save: $$

5. Stay in

You don’t have to eat every meal out. Book an apartment or room with a kitchenette and cook your own meals. Even if you just make your own breakfast or lunch a few times, you will save.

Save: $$

6. Research, research, research

Before you travel, read up on all the things you want to see and do. If you have a plan, you’re less likely to waste money on activities that turn out to be, well, a waste of time. Leaving more time –
and money – for you to sit back, have a mojito and think about the next holiday you’ll take with the savings you’ve just made.

Save: $$$

The post Six ways to save money while on holiday appeared first on Credit Simple.