If you’re feeling anxious about your debts, it’s time to start communicating. Here are five steps you can take to talk to your credit providers about debt.

1. Call your credit providers

If you’re feeling overwhelmed by debt, give your credit providers a call. It is in their best interests that you make your repayments, so there is no harm in having a chat.
Call your utility company, telco or lenders and explain your financial hardship. If the customer representative you’re speaking with is unhelpful, escalate your call to a hardship officer or manager.

2. Talk it through

Go through your options with your credit provider. They may be able to offer you more affordable repayment plans, due date extensions or hardship variations.

Many credit providers can amend their terms to ensure you can continue to pay. You might be surprised at the options they have available to you.

3. Aim to agree

By now you would have done a budget and know your incomings and outgoings. While the aim is to at least meet minimum repayments, you should have a good idea of what you can and can’t afford. Therefore, if there is no way you can meet your minimum obligations, you should negotiate alternative payment structures. And if your situation changes, let them know straight away.

4. If debt issues persist

If you’re still finding it difficult to get on top of your debts, you can reach out to the National Debt Helpline on 1800 007 007 or contact a Financial Counsellor. The National Debt Helpline can put you in contact with your local service.

5. Don’t be lured by quick fixes

There are many providers out there promising to consolidate your debt, refinance and transfer your balance. Some of these can be legit and may help you. But they can also add to your financial burden through hidden fees, higher interest and lock-in contracts.

Our advice: be aware! Don’t look at these options until you have spoken with your current providers about your situation.

For more tips on how to stay on top of your finances, sign up or log in to Credit Simple.

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Rewards credit card programs have exploded in recent years, offering everything from flights to merchandise to cash in your pocket. With so many options, it’s important to choose a rewards card that suits your lifestyle and preferences. Here’s how.

What is a rewards credit card?

Rewards credit cards typically work by letting you accumulate a certain number of “points” for every dollar you spend and you can later redeem these points for valuable goods and services like flights, household items or even cash back.

Many cards these days offer rewards from all categories, although it’s common for them to target a particular lifestyle. For example a travel credit card might offer travel and cash-back rewards but offer a better points-to-reward ratio when you use the points for travel.

The difference between rewards cards and perk cards

Don’t confuse rewards with perks like discounted movie tickets or free travel insurance. Rewards cards may contain perks like this, but cards can offer perks without having a points-based rewards system.

What types of rewards cards are there?

Here are the most common types of rewards cards, although many of them will offer rewards from multiple of these categories:

• Travel cards. These cards let you earn points redeemable for travel-related rewards like flights, hotel stays, cab rides, amusement park tickets and airport lounge access.
• Cash-back cards. These cards let you earn points redeemable for cash, usually in the form of a deduction on the balance you owe.
• Shopping cards. These cards let you earn points redeemable for merchandise raging anywhere from sporting goods to appliances to children’s toys.

It’s also possible to find cards that cater to specific hobbies. For example a golf rewards card might let you earn extra points when you use the card at a golf course and/or offer golf-related  rewards at a points discount.

How do you earn points?

There are several ways you can earn points using your rewards credit card:

• Being approved for a card. Some rewards cards will give you a lump sum of points just for signing up and being approved for the card. They may give you the points right away, or only after you have charged a specific amount to the card within a specific timeframe.
• Everyday spending. Most cards issue a certain number of points for every dollar you charge to the card. Some charges may not be eligible for points, for example, balance transfers.
• Spending on specific products and services. Your card may issue additional points, above and beyond the points you get for everyday purchases, when you use the card for specific products and services. For example, a travel card might issue additional points for every dollar you spend on travel-related purchases.

How do you choose the right rewards card for you?

Don’t just apply for the first rewards cards that offer a bunch of points just for signing up. Instead take your time to consider what you want out of a rewards program and how you plan on using your card. Here are some factors to consider:

• Will you pay your balance in full every month? Most rewards cards come with an annual fee, so if you plan on carrying a balance (ie, paying interest), consider skipping the rewards in lieu of a no-annual fee card instead. Otherwise, look for one with a low fee or that offers other valuable perks.
• What rewards are you interested in? Many rewards cards aim to appeal to certain types of people, for example travel cards are aimed at travelers, shopping cards are aimed at people who like to shop and cash back cards are aimed at the frugally minded. You’ll obviously want a card that offers rewards that actually excite you.
• Is there a cap on points? Some cards will limit the number of points you can earn every year. If you plan on using the card a lot, it might be worth seeking out a card with a higher cap or no cap at all.
• How much are points worth? You can make a rough estimate by noting the number of points it takes to get a particular item and then dividing that into the item’s monetary value. You can then use this information to compare the point value on a few different cards.
• How easy is it to redeem points? With some rewards, it might take several steps to redeem your points: for example, a travel card that lets you exchange your points for an airline’s frequent flyer miles, where you’d still have the extra step of redeeming those miles for your flight. If you’re considering a card, find out what the redemption process is and decide if you’re comfortable with it.

Bottom line

A rewards card can be a great way to extract additional value from your credit card, provided that you use the card responsibly and don’t rack up fees and interest charges that cancel out all that added value. Just make sure you choose a card that suits your interests and makes it easy to redeem and enjoy your rewards.

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.

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The term ‘neobank’ refers to a new crop of financial institutions that has been sprouting up throughout Australia and the rest of the world since at least 2017.

What makes these banks different from traditional banks is that they have been reimagined from the ground up with a purely digital focus – to run seamlessly through an app and with no branches anywhere in sight.

What are the benefits of using a neobank?

The outside-the-box thinking common to neobanks offers several advantages over traditional banks:

• A better digital experience. Neobanks’ digital offerings aren’t hamstrung by complex legacy systems common to traditional banks. That lets them quickly develop and release features like peer-to-peer payments, spending analysis, AI-based money management tips and customisable user-friendly dashboards.
• Lower costs. The lower cost of operating a digital bank means the bank can pass those savings onto you in the way of no-fee accounts, a free debit card and overdraft protection – by not allowing you to overdraw in the first place!
• Less hassle overseas. Many digital banks offer fee-free international transactions at highly favourable exchange rates. Some digital banks will even let you store multiple currencies all within the same app.

What’s the difference between a digital bank and a neobank?

You may be wondering about digital banks like ING, ME Bank and UBank. After all, they don’t have any branches (at least until recently), they operate via an app and it seems like they’ve been around forever.

The truth is, these banks aren’t truly 100% digital; they’re usually operated by a large traditional bank. For example, ING is owned by ING Bank, ME Bank by industry super funds and Ubank by NAB. Digital banks generally have the same drawbacks that traditional banks have, namely they generally operate off a digitised version of their legacy systems.

There’s nothing wrong with digital banks like these. After all, their lack of branches translates into lower operating costs for the bank and ideally better terms for you.

But neobanks take this one step further by focusing on purely digital solutions that are built from the ground up for a digitally savvy customer.

Are neobanks safe?

A bank needs to become a licensed authorised deposit-taking institution (ADI) to take deposits in Australia. This means they have to go through the regulatory process to get approval from and be overseen by the Australian Prudential Regulation Authority (APRA).

Being an ADI means the bank has demonstrated to APRA that they meet APRA’s prudential standards and other regulatory and legal requirements.

It also means the Australian government will protect your deposits up to a cap of $250,000 with that ADI

Are there any neobanks in Australia and what services do they offer?

Here are the Australian neobanks with full ADI status offering consumer-facing products as of November 2019:

• Xinja. Offers transaction accounts and is beta-testing home loans.
• 86 400. Offers everyday transaction accounts, savings accounts and home loans.
• Up Bank (through Bendigo and Adelaide Bank). Offers everyday transaction accounts and savings accounts.
• Judo Bank. Offers small-business loans and term-deposits.

Other financial institutions that either don’t yet have an ADI or have not officially launched any products include Revolut and Qpay.

The information in this article 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, financial, and other professional advice.

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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.

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As the long weekend kicks off, it can be all too easy to fill your time with fun and frivolous spending. But before you know it, Monday night rolls around and your bank balance is looking more than a little depleted.

Luckily, it doesn’t take much to reset your default setting from ‘spend’ to ‘save’ for a few days, and the savings can be pretty significant. Read on for our tips to boost your savings in just a few days.

Skip 1 thing
You probably have a pretty good idea of which is your biggest discretionary spend. But what would happen if you skipped it, just for this weekend? It’s easier than you think.

For example, for many of us, a big money suck can be eating out. With 4 days off, you could find yourself eating out a couple of times a day and think nothing of it. With even your local cafe or Thai restaurant setting you back at least $20 a head. If you’re a couple or a family, you could save hundreds of dollars.

Only use cash
Studies show that when we use cash rather than cards, we feel the loss of money more. This is because cash is a physical, tangible thing you have to give away to pay, while credit and other payment methods feel hypothetical or even non-existent.

Switching to cash not only makes it easier for you to mentally track your spending, but if you take out a set amount at the beginning of the long weekend, it makes it much easier to stick to a budget.

Take the zero-spend challenge
This one’s a game changer. For a single day (or even the whole weekend if you feel like an epic savings challenge), don’t spend a single cent and see what happens.

As an added bonus, you’ll find that (as long as you have a well-stocked fridge and ready access to a car or public transport) that the possibility for free activities are almost limitless. Make your own coffee, go for a run, fire up netflix, have some friends round or chill in your local library. It can be a really fun experiment.

Apply the ‘clean slate’ principle
If you spent Friday-Sunday on a bit of a spree, that’s actually ok – studies show that at the beginning of a week, month or any time that feels like a ‘fresh start’ is the perfect time for habit change.

With that in mind, Monday or Tuesday may be the perfect time to set up a new budget or set and ambitious savings goal, especially after a few days of spendthrift-madness.

So go on, take the challenge – enjoy a low-spend long weekend. It could save you heaps!

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If you’re considering opening a new credit card, you may worry you’ll overspend and get yourself into trouble.

And understandably so – the Australian Bureau of Statistics reported that the average household debt in Australia is $168,600, and the most common form of debt is credit card debt.

So how can you use a credit card responsibly? Let’s look at the best ways to stay disciplined.

Think of your credit card as a debit card

A great way to stay disciplined with your credit card is to treat it like a debit card. This does not mean that you can pretend your credit limit is your account balance. It means that you should never let your purchases exceed what you have in your checking account.

You should monitor both accounts regularly. Every two weeks or once a month, you should pay off your entire credit card balance with your attached checking account.

You may then be able to take advantage of the cash back or rewards programs connected with your card, and you may not have to worry about racking up debt. The Sydney Morning Herald says that you may be able to get around $200-300 per year in rewards alone.

But be careful with rewards programs. Don’t convince yourself you need to buy something extra just so you can get 5 per cent cash back. Rewards may only benefit you if you make purchases as you would normally.

You may then earn money on your usual spending, whether in cash or in airline points. Sounds pretty great, right?

Give your credit score a boost

Another benefit of credit cards is they can help your credit score. But don’t apply for a lot of cards at once – too many enquiries can impact your score negatively.

If you’re able to keep your credit card balance low, and you make payments on time, the longer you have the card the more it could boost your credit score.

Fraud protection and insurance with credit cards

Credit cards can come with other benefits aside from cash rewards. You can receive (sometimes complimentary) travel insurance through your card company, as well as price and purchase protection insurance, Canstar says.

Most cards also protect you from fraud. Security protections may ensure that suspicious purchases are detected each time a transaction comes through.

So can you be disciplined with credit cards? Consider these benefits. Staying on top of your balance by using your card as a debit card could allow you to take advantage of rewards programs, protections and a credit score boost.

For more information about your credit score or card benefits, get in touch with us at Credit Simple today.

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As the winter months come to an end in Australia, you’re probably antsy to get out in the warmer weather. But getting out more could also mean increased spending.

If you’re trying to figure out how to save this spring and summer, easy ways to get a boost include sticking to a budget, using credit card rewards, having social functions at home and saving on energy costs.

1. Stick to a budget

Sticking to a budget is easier said than done, right? But it does work, especially with new spend tracking technologies.

First, figure out your monthly income after tax. Then, make a list of monthly expenses, including housing costs and bills. Look at past statements to figure out how much you spend on groceries and other necessities.

Make firm commitments on how much you can spend in each category.

You’ll see how much you should have left over each month, and you can be mindful of unnecessary spending. Make firm commitments on how much you can spend in each category.

Pro tip: use a program like Money Simple, where you can track all of your financial accounts and your spending habits.

2. Use credit card rewards

Many people across the nation have credit card debt, which may stop them benefiting from rewards programs. Australia’s Securities and Investments Commission (ASIC) reported that one in six Aussies struggle with credit card debt.

However, if you can pay off your debt and begin to use your credit card almost like a debit card, you can earn substantial rewards.

Use your card as if it’s linked to your checking account, and pay it off once or twice a month. Most credit cards have a rewards system where you can get cash back on every purchase.

As long as you stay on top of your balance, you may never have to pay interest. You could instead cash out those rewards. Doing so may give your savings an extra boost without having to do anything but spend money normally.

Just make sure you don’t accrue any debt from one month to the next. And, watch out for credit cards with high annual fees.

3. Eat and drink at home

Eating and drinking out can really drain your account. Instead, try having friends over for a night in.

In 2016, the average household spent around $50 per week on restaurant dining.

Buy groceries more often so you won’t be tempted to eat out. An ASIC survey found that in 2016, the average household spent around $50 per week on restaurant dining.

During tight months, that extra money can really come in handy.

4. Save energy costs

Warmer months can be a great time to save extra on energy costs. Simple tactics you can try include using energy-efficient LED light bulbs or washing your clothes in cold water, Canstar suggests.

You can also review your current electricity and gas plans and see if you’re getting the best deal for your area.

This spring and summer in Australia, try these simple savings strategies. For more information about how to manage your money, sign up for Credit Simple today.

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