Finances

Today both Tony and I got a letter in the mail to say the interest rate on our personal loans has gone up by 0.25% to 14.17%. It got me thinking about how we can be paying less on these loans and therefore pay them off faster. I vaguely remembered a friend from work talking about a good deal citibank has going at the moment on balance transfers even if it's from personal loans.

So I checked it out and it's going to save us about $4000 over the next 5 years! So we will be paying 6.9% instead! What is the catch I hear you say. Well the 6.9% is on the balance transfer only, but it is for the life of the transfer. The catch is this, it's basically a credit card, so what you pay back you can re-use, but it costs you 13.75%. So I guess they figure Joe Spend-a-lot will keep re-using the credit and never really pay it off. We however have no need for an extra line of credit and so will instead simply use it as if it is a personal loan that we can not re-draw on. So you can basically consolidate credit cards, personal loans and store cards all into this 'personal credit' as they call it.

We have a pretty wicked credit card set up with a new St George vertigo mastercard, so we will only do the personal loans. We get 6 months intrest free on the St George credit transfers. So in that 6 months the money I would normally put towards paying back the credit card goes into my ING savings maxamiser which pays about 6.65% (sometimes higher) interest. So I make some interest while I'm not paying any interest. Genius! If my plans go correctly, by the time the 6 months is up we'll almost be able to pay off the whole thing. I'll be sooo happy when that is gone because then we can start thinking about houses and weddings.

Changing banks, credit card providers and loan providers is a pain in the ass I will admit, but it is worth it for the savings you can get. There are so many financial products out there on the market right now it seems silly to stick with the old fashioned 18-20% interest rate credit card and the clunky old personal loan. Websites like Credit Card 4 U are great and take all the guess work out of finding something that suits your needs. So seriously people, take some time and re-look at your finances, it's amaing how many thousands you can save yourself by shopping around.