Over the previous couple of months, we’ve seen the Covid-19 pandemic have an effect on all elements of day-to-day life, from grocery procuring to heading into work.
However in accordance with new Mozo analysis, it looks like it may have had a constructive impression on the way in which we take into consideration debt.
Earlier than the pandemic hit, a substantial 67% of Aussies believed that debt was a ‘necessary part of everyday life’, however now one in 4 are reportedly working towards erasing debt for good.
“Historically, Australians haven’t been afraid of debt, particularly through our love of credit cards. We’ve racked up debt with the assumption that job security and a steady paycheck is a relatively safe bet, but a global pandemic has tipped that notion on its head as unemployment soars,” mentioned Mozo Director, Kirsty Lamont.
“For many people, Covid19 has been a wake up call to get their finances in order, and eliminating debt is a key part of that.”
Mozo discovered that 68% of Australian households at the moment have some type of private debt, like a bank card or private loan, whereas 73% of these with debt are involved in regards to the stage it has reached, with one in 5 not sure how they may repay it.
Different monetary targets Aussies are eager to work on embody constructing an emergency financial savings fund, spending much less on non-essentials and now not spending past their means.
Taking step one towards banishing bank card debt
Though bank card balances have fallen by 8.5% within the final two years and the typical steadiness sits beneath $2,000, many Aussies may be at the hours of darkness about making their first transfer.
One possibility may be to take out a steadiness switch bank card. These will let you switch the steadiness of your present bank card onto one other with a 0% rate of interest for a sure time frame. This doubtlessly permits Aussies to save lots of a bundle in curiosity.
The truth is, following a Mozo quantity crunch utilizing the typical bank card debt ($4,200) and a typical rate of interest of 16.88%, a steadiness switch card with a 0% rate of interest might ship financial savings of as much as $560 over 12 months.
Nonetheless Lamont has warned that to ensure that a steadiness switch card to be efficient, Aussies might want to have a reimbursement plan in place to keep away from being stung by curiosity.
“While balance transfer cards are a great way to put all your debt in one place, it’s crucial for you to use a card with an interest free period that is attainable. It pays to be aware that you can be hit with some massive interest price hikes after the interest free period,” mentioned Lamont.
For those who’d like to search out out extra about how steadiness switch bank cards work, try our useful information!
Or if you happen to’re able to eradicate your bank card debt as soon as and for all, head on over to our steadiness switch bank card comparability software!