Household Bills Piles Up
NEW research shows that one in three Australians is regularly putting one or more everyday bills such as utilities, car registration and groceries on their credit card, but are not paying the balance off in full each month.
The survey conducted by the Australian Institute for Citi Australia group categorises such behaviour as ‘playing catch-up’ because people face higher rates of interest on household bills, due to a lack of cash flow.
Identity Theft on the Rise
Research shows that 4.4 million Australians were affected by identity theft – an increase of 600 000 people in past year.
Recently released figures, from Veda Advantage, showing the incidence of identity theft in Australia is increasing, with 4.4 million Australians (26%) affected by identity theft compared to 3.8 million (23%) for the same period last year.
The report also found despite increasing attacks of identity theft, 67% of Australians have failed to take even simple measures to protect their identity. This is only a marginal improvement from the 70% of Australians who said they had not taken any steps to protect their identity in March 2008. Read more
Sir Allen Stanford, Who?
Sir Allen Stanford: how the small-town Texas boy evaded scrutiny to become a big-time ‘fraudster’
For a town of just 10,000 people, it is remarkable that Mexia – motto “a great place, no matter how you pronounce it” – should throw up two larger-than-life characters: Anna Nicole Smith and Sir Allen Stanford.
On Friday, as the ECB sheepishly announced it had severed its ties with the 58-year-old banker following allegations that he carried out a $9.2 billion fraud Read more
Tips to Get Yourself out of Credit Card Debt
1. Consolidate debt. If you love credit cards and have more than one fix the one with the smallest interest one and get rid of all the rest. You’ll save lots of money on annual fees.
2. Transfer a balance transfer to a new card on a low rate. Choose the zero per cent credit cards. Be careful tand close down all cards with have debt on them.
3. There’s also a new reproduce of card message a low rate for the life-span of the balance. This is worth considering if you can’t respond the debt in the fleeting quantity.
4. Change to a debit card, where you someone the flexibility of using a card but you are spending your own money.
5. Try and pay the minium payment as soon as possible
6. Beware of cash advances, because interest can accrue quickly. Usually no interest-free life distribute on cash advances. High fees may also allot on cash advances.
7. Always Check if electronic bill payments (BPAY) are regarded as cash advances by your businessperson.
8. Pay cash advances off as shortly as achievable, but tab how often you necessary to pay — you may want to offer to pay the untasted balance, as any payments you micturate may be practical to purchases original.
10. Set up a forthright debit from your account to pay the credit card. Going beyond the due date will bring late payment fees as much as $35.
Visit Credit Card Offers for more information on Visa Debit Cards
Escaping the debt trap
THERE is a debt crisis among Australia’s young people. The “buy now, pay later” culture promoted by retailers and lenders is impacting heavily on consumers with the least experience of credit and debt.
Just over 40 per cent of all debt agreements are signed by people under 30. A debt agreement is a low-cost alternative to bankruptcy that more and more people are agreeing to undertake.
Making money from bear share markets
IF history does indeed repeat itself, now is the moment when a lot of investors will amass great fortunes, UBS wealth management head Liz Cacciottolo says.
By last week, “the general feeling from clients was that it has got to such extreme levels that value is there, and we saw a bit of cautious buying”, she told The Australian.
Credit Card or a Loan?
IT IS the twelfth round and both fighters are on the ropes.
Credit cards, popular with the crowd, have been through a lot of fights and are a little punch-drunk.
Personal loans may not be as popular but their lower interest rates are keeping them light on their feet.
OK, it’s not quite a sweat-laden title fight, but you can win if you know their game plan.
Why a credit card
Australians had 12.3 million credit cards in their wallets in July, carrying $40.4 billion of debt. We clearly like them, Zobel Finance manager Simon Burgess says. Read more
The high cost of credit
Interest rates on some cards are rising, putting debt-laden users under more stress, writes Lesley Parker.
You may well know your mortgage interest rate to two decimal places – before and after the recent rate cut – but chances are you don’t know the rate on your credit cards.
Amid all the hue and cry about home loan rates going up over the past year – when lenders decided they’d go even further than the central bank – not much was heard about cards.
Read more
Patience the best pathway to wealth
INVESTORS who are seeking the secret to becoming rich are likely to be disappointed to find there is no secret.
Rich people invest most of their money in the same assets as everyone else, financial experts say, but there are two key differences: A different mindset to investing and different structures to hold their investments. Read more
Dollar’s big drop could save us from recession
DOLLAR has become a dirty word for many people planning to take an overseas holiday soon.
The dramatic descent of the Australian dollar over the past month – from almost US98.5c to US85c – has severely dented their buying power on several continents.
However, the slumping currency could be a key factor in preventing Australia from following much of the Western world into recession.
“For the economy as a whole it’s good news, even though it’s bad news for travellers,” says AMP Capital Investors chief economist Shane Oliver.
Just over a month ago many economists were predicting our currency was about to reach parity – where one Aussie dollar buys one American dollar.
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Now there are predictions for it to fall further in the short term, down to about US80c. Yesterday the Aussie dollar was buying US85.4c.
So what has caused such a sharp U-turn?
Firstly, the Reserve Bank of Australia has been making serious noises about lowering the official interest rate, with its first cut expected today. Second, commodity prices such as oil and base metals have dropped heavily amid fears of global economic slowdown.
“The Australian dollar is still seen as a commodity currency,” Dr Oliver says.
Third, the US dollar has bounced back against most other countries’ currencies in recent weeks.
These factors have combined to force the Aussie dollar to a seven-month low, although it should be put into perspective. A US85c exchange rate is still much stronger than the levels below US50c it hit in 2001, back when it earned itself nicknames such as “Pacific peso” and “little Aussie bleeder”.
While overseas travellers might wish to protest, the latest drop in the dollar creates more winners than losers.
“At US98.5c it was bad for the competitiveness of Australian companies,” Dr Oliver says. Now, exporters will find customers can better afford their goods.
Farmers will get more money for their crops, miners will get more money for their metals, and even local tourism operators will find their sector becomes more attractive to foreigners as travel to Australia becomes more affordable.
Just as Aussies heading offshore have lost up to 15 per cent of their purchasing power in a month, many travellers coming to Australia now get 15 per cent more.
Prescott Securities chief economist Darryl Gobbett says wine exporters and motor vehicle manufacturers will also benefit from the local currency’s fall.
“A lot of exporters would be pretty happy about it,” he says. With businesses benefiting from these improved terms of trade and being less likely to slash jobs, the risk of Australia sliding into recession is reduced.
But AMP’s Dr Oliver says we are not out of the recession woods yet.
He still thinks there is a 40 per cent chance of Australia going into recession, up from a 20 per cent chance at the start of the year but less of a chance than it would have been had the Reserve Bank not suggested that interest rate cuts are on the way.
“The Reserve Bank has started to head off the risk,” he says. “Lower interest rates will certainly help, but they haven’t improved in the US, UK and Canada.
“There is still a risk. At last count there were 12 significant economies around the world that have recorded negative gross domestic product (GDP) growth in the March and June quarter.”
Australia’s annual economic growth has slowed sharply from 4 per cent, and figures due out tomorrow are expected to show just 0.3 per cent GDP growth for the June quarter and an annual rate of 2.8 per cent.
“We are probably on the way to about one or 1.5 per cent over the next 12 months,” Dr Oliver says.
“Obviously the mining sector is still keeping us afloat. The consumer side already seems to be in recession.”
Mr Gobbett is more confident that Australia will avoid a recession.
“I don’t think too many economists would see a classic recession of two quarters of negative growth,” he says.
“Most see the economy growing in 2008-09 at 2-3 per cent.” He points to a “huge” pipeline of infrastructure development in Australia.
“There’s probably 12 to 15 desalination plants built over the next year or so,” he says.
“Some commodity prices have taken a hit but copper prices are still quite strong and a lot of the big commodities – iron ore and coal – are staying quite strong.”
The commodity story, driven by surging demand from China, which still has growth rates three and four times bigger than Australia, is expected to continue to be a positive one and is a key factor why many economists expect the long term trajectory of the Australian dollar is upward.
“The currency likely has more downside ahead of it over the next six months or so, possibly to around US80c,” Dr Oliver says.
“However, the long-term trend in the Australian dollar is likely to remain up in response to the long-term rising trend in commodity prices.”
With more short-term weakness tipped, there are two messages for would-be overseas travellers. Number one, be thankful it’s not 2001.
Number two, remember that not every country’s currency is based on the U.S. dollar. Large parts of Asia and Africa – and of course America – are, but Britain is not.
The British pound is currently at a two-year low against the U.S. dollar and 47 pence against the Aussie as it flirts with its own recession.
A holiday in the Old Dart is becoming more attractive by the day.
news.com.au