News

NewsCutting credit cards for personal loans
Cutting credit cards for personal loans

Cutting credit cards for personal loans

Tags: FiftyUp Club
Last updated by Heath Davis on

There's a quiet revolution going on in the otherwise boring world of banking: thousands of smart Aussies are cutting up their credit cards in favour of personal loans. 

Mozo says personal loan borrowing is growing twice as fast in Australia as credit card debt according to APRA data.

In fact, personal loans are fast becoming the borrowing tool of choice, particularly for those with good credit ratings.

So why are thousands of Aussies suddenly driving better borrowing deals?

Read more on Mozo’s top 10 loans here

*In providing credit services to our members FiftyUp Club make no enquiries about an individual’s financial situation, requirements and objectives. By providing a means for members to contact Mozo Pty Ltd directly we are not providing credit assistance but acting as an intermediary.

As a result of services provided by us Mozo Pty Ltd may pay The FiftyUp Club a fee of up to 50% of any fees they receive from their providers. These fees may be based on either referrals to third parties or on application or approval for products from third party providers; for further details see Mozo's Financial Services Guide available here. 

Originally posted on .

Join the conversation

FiftyUp Club
Cutting credit cards for personal loans

Share your views with other members. 

Want to leave a comment? or .
Read our moderation policy here.
Gertraud
Gertraud from ACT commented:

I don't need a personal loan but I certainly need my credit card which is used for most purchases and paid off in full each month. 

margaret
margaret from NSW replied to Gertraud:

Oh Gertraud you are good with money, we know that from your many previous posts (how is the patchwork coming along?) however so many of us are not. Now that is not a problem for those who understand this, accept it and work around it. Unfortunately there are many who year after year tell themselves next month I will do better, and next month I will do better, whilst getting further and further behind. Just put the card into the machine, wave the card here, tap the card there, allow them access to your bank balance and they will withdraw what ever is appropriate, and you will receive an email which of course, Capable Little Accountant you, will enter in your digital accounting system immediately and will always know just how much you do and do not have. Oh yes, of course. For many,who are more than old enough to know better it hardly seems like spending real money, just wave a card and receive goodies. Too bothersome to keep up any real record of all spending espec. if one has a couple of cards, a few companies paying themselves from your bank account and the day by day cash spending. It is all too difficult to sort at this point, however next month they will and and next month......... 21 years ago when my income diminished, I was smart enough to know I was not that smart with money, got rid of two credit card and a cheque account, lived with only an EFTPOS account and took out the needed real money each week, plus an amount for any bill that needed paying, carrying my EFTPO card for emergencies. I also did the childish thing of having jars for various expenditures that could spread over a couple of fortnights or even months. It worked for me. I now have a substantial intrest bearing account, plenty in my EFTPOS account and enough cash on hand for 'just in case' The best plan will always be the one that really works for the individual, they accept this and adhere to it.. By the way Gertaud are you still losing pieces of cheese at the back of the fridge? 

Gertraud
Gertraud from ACT replied to margaret:

Actually, I am an accountant, but I do not keep records of my personal expenditure. Having spent most of my life as a ingle parent, first raising three children and then another who is now 27 (I'm 70) while struggling to achieve not only a work/life balance but also staying on top of my mortgage and family expenses, I learnt at an early age how to be frugal even though I carried a credit card debt from one month to the next. In the final few years I shoveled as much money into super as I could, knowing that I would not be entitled to an age pension because of real estate assets. I am keeping real estate income and expenses completely separate from my personal income and expenses, using an offset account to manage the properties and paying down the mortgages. After retiring I closed down my self managed super fund to pay off the mortgage on my home and I am living off a defined benefit super pension of around $25,000 per annum - not much more than the age pension, in fact, after having tax deducted I receive just $916.15 in my bank account per fortnight! Of this amount $500.00 is put into an offset account to cover my budgeted expenses such as rates, electricity, gas, water, insurance, car rego, NBN, mobile, as well as birthday and Christmas presents. The balance of $416.15 covers food, fuel, and any other personal expenses. I have another offset account into which I put income from dividends, tax refund and any other windfall money, this is my 'travel fund'. I have two credit cards that I use for my purchases and unless I paid them off in full each month while exercising restraint to keep spending at a manageable level, I would be drowning in debt within a few months without a hope on earth to pay off my debt. As to cheese at the back of the fridge, I have no idea what you mean. 

margaret
margaret from NSW replied to Gertraud:

Thank you Gertraud. That is what I meant about handling money well. Many simply do not manage on what could be a reasonable amount because they do control their spending the way you do, and therefore possibly would not be any better off even if they had a little more. Unfortunately working in retail and renting did not allow me much shoveling of rent into super however the $1020 that goes into my bank each fortnight plus about $1400 per year from craft, covers the $540 per fortnight rent,and after saving $42 and paying gas elec phone dongal and water still leaves me $280 for food fares household clothing presents fun etc, and although it is tight, with the bit of craft money I manage quite well. Not to much fun things though. I also hit the big 70 this year. Got my first ever washing machine (second hand $50) three weeks ago and that really makes life easier. The cheese ? I thought that some time ago you were once part of a conversation about singles purchasing larger quantities of food when on special and commenting that for you this did not work for you as cheese seem to end up hiding at the back of the fridge and was wasted. Sorry it must have been someone else. Anyhow we both seem to manage our money reasonably well on not too large an income. Cheers. 

margaret
margaret from NSW replied to margaret:

Sorry,Line three of the above reads 'do control their money', It should read ' do not control their money. Completely different meaning. Again sorry. 

Comment Guidelines