credit Archives - Credit Simple NZ

In debt? Here are some red flags that you are in too much debt and what you can do.

Credit Simple — Wed, 09 Jan 2019 03:51:57 +0000

Are you swimming in debt? Or even drowning? You’re not alone, thousands of Kiwis have that same feeling they are sinking financially.

Debt has its uses and can be used to spread out large or unforeseen expenses. Being in debt all the time, however, isn’t okay and you need to use credit, not let it use you.

But there is a way out. Debt can be whittled away one dollar at a time if you start today.

So what is “too much debt”? There are some real warning signs that indicate you’ve got too much. If two or more of the Red Flags below apply to you then face up to the fact: you have too much debt.

Do these red flags sound like you?

You view your overdraft or credit limit as your money when you’re spending it , not something you owe. That makes it too easy to spend up to the maximum every month. Over the past couple of generations we’ve changed from seeing debt as something to be embarrassed about to a normal everyday occurrence. Overdrafts, credit cards and HP should be there for emergencies, not used as a day to day way of getting cash that you can’t afford.
You get charged dishonour (or honour) fees most months. These fees add up quickly and help your debt spiral out of control. At the very least you need to do a serious reorganisation of your accounts so that your spending money is kept separate from money for essentials. That will help you avoid fees.
You have had credit denied. If banks or lenders refuse you credit it’s a real red flag that something is wrong with your finances. Sit up and take notice.
You lie to loved ones about your spending and debt. Lies can bring an apparently good relationship to a stop fast. If you’re lying regularly to your other half or even yourself, you need to change your ways.
You use cash advances on your credit card when you run out of ready cash. Cash advances are incredibly expensive because you’re charged fees as well as interest from day one. If you access credit this way then there is something wrong with the way you manage money.
You are late paying rent and other bills such as utilities and credit cards. If you receive overdue reminders month in month out then this is you. Those reminders should flag to you that you need to take back control of your finances.
You don’t know exactly how much you are in debt. Denial is common with serial debtors. Tot your debt up today and then you can start working out how to start reducing your debt mountain.
You don’t open letters or answer phone calls because you’re scared they will be from creditors. Budget advisers (AKA debt counsellors) see this every day. It’s a classic symptom of too much debt and is a real red flag that something needs to change.
You worry about your bills, lose sleep or drown your worries in alcohol or drugs. Worry and anxiety are not good for your overall well-being. Take the first step today by getting in touch with a free budget adviser or ask for an appointment at your bank. They’re happy to help customers sort out their finances.
You don’t have any savings at all. We all need some savings – even if it’s just an emergency fund to tide you over if you lose your job. If debt is getting in the way of this, you’ve got a problem.

There’s nothing like a good dose of honesty to turn your debt around. It’s no use thinking that the problem will go away. If these red flags apply to you, you need to take a dose of truth then make changes. Now.

If your attempts to change in the past haven’t worked then see a budget adviser. Virtually every town in New Zealand has one – and they’re free to visit. Look up “Budget Advice Services” on whitepages.co.nz, or find out about the New Zealand Federation of Family Budgeting Services.

Finally, debt counsellors can’t wave a magic wand and make your problems go away, Aladdin-style. It’s going to require hard work on your part. But you’re the one who will get the most out of this exercise.

The post In debt? Here are some red flags that you are in too much debt and what you can do. appeared first on Credit Simple NZ.

Got a Christmas debt hangover? We’ve got tips to help

Credit Simple — Wed, 09 Jan 2019 02:54:39 +0000

The post-Christmas season can be a tough one, and our data shows Kiwis are more likely to let their credit bills languish unpaid at this time of the year compared to any other. If you’re anything like the average New Zealander, you’re probably feeling the effects of spending up large in the lead-up to the festive season and in the wake of Boxing Day sales.

Usually around 6.4% of credit card accounts go past due without being paid, but in the January to March period, this jumps to 7.6%. It might not sound like much, but in a nation with $6.6 billion outstanding on credit cards, that little extra interest-incurring period adds up to millions in extra interest payments for consumers.

“It’s easy to get caught up in spending over Christmas, but if you’ve used credit to get through the holiday period, the next few months are crucial to ensuring your credit health,” says Credit Simple CEO David Scognamiglio.

“Late or missed payments on any borrowed funds will damage your credit score and could prevent you from getting credit again, so it’s crucial to make a plan to pay back and credit consistently and on time to keep your credit score healthy.”

And here’s what you’ve been waiting for: our five top tips for recovering from a post-Christmas debt hangover:

Shop around for a better deal on interest

Chances are you could be getting a better deal on any loans, credit cards, mortgages and even utilities, you just need to shop around. If you’ve been paying your bills on time and have a good credit score, credit providers will be eager to give you a handsome deal since you’re a good risk. Negotiate with your bank and current phone, power, insurance and internet providers to see if they can offer you better rates, and see what their competitors would be willing to offer you, too. You might be surprised at how much you could save in the long run in fees and interest.

Consolidate your debts

Debt consolidation is the process of rolling or “consolidating” a number of different debts into a single loan or credit card, often with a lower overall interest rate. This can help you manage your money better by paying off a single amount each month. Debt consolidation loans and Balance transfer or low rate credit cards are the most common way to do this.

Limit credit applications

Each time you apply for credit it leaves a record on your credit file, and this typically makes your score drop. If you applied for credit before Christmas and now you’re going back for more, it’s going to pull your score down. There’s nothing wrong with changing your credit providers – in fact it can save you money – just make sure you’ve done your research and only apply for the best deal, rather than applying for whatever you can and then deciding on which one you want later.

Pay high-interest debt first

Prioritise your loans and ease the pain of interest by paying off the debt that’s incurring the most interest first. It can save you a lot of money in the long run.

Consistency is key

Paying your bills consistently and on time is the best thing you can do to make sure your credit score stays healthy. Set up automatic payments to pay bills straight away and your score will thank you. Pay more than the minimum amount required on loans and credit cards if you can too.

Avoid a default

If you’re feeling under pressure to make debt repayments, talk to your credit provider, don’t just ignore it and miss payments – your credit score and file will suffer. You may find your credit provider can put you on a different payment plan, making it feasible to meet your repayment obligations.

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 Got a Christmas debt hangover? We’ve got tips to help appeared first on Credit Simple NZ.

Got a Christmas debt hangover? We’ve got five tips to sober up your bank balance

Credit Simple — Tue, 24 Jan 2017 00:33:57 +0000