2014 End of Financial Year Tips

A word from the editor

Start the new financial year by minimising credit card stress

With the end of the financial year fast approaching, it's normal to be worried about those dollars looming over your head.

If you're dedicated to a fresh start next financial year, you may be wondering where to start - and with alluring sales messages everywhere, it can be an intoxicating mix.

So what are some of the ways we can truly reduce our debt?

I've assembled some of my hints and tips that many Aussies have used to save money and pay off their credit card.

Kick off the new financial year with interest-free purchases

Consider a 0% p.a. purchase credit card as these type of cards allow you to pay 0% p.a. on purchases for an introductory period. This type of offer could benefit you if you need to make a large purchase but can't pay it off straight away.

If you made a one-off purchase of $1000 on a credit card with a 0% p.a. offer for 5 months and you paid off the balance within this period, you would not be charged interest on that purchase for 5 months.

However, if you made the same one-off purchase with a credit card offering 17.99% p.a. and made the same repayments of $200 per month, you would end up paying $1084 over a period of 6 months - a difference of $84.

Use your tax return to pay off your debt

According to the ATO, the average tax return in 2012 was $2552.46. Since the average Aussie has a credit card debt of $3,217.65, taking this opportunity will mean you've paid off 79% of your debt in one go.

Average tax return vs average credit card debt

This is the perfect time to look at your spending habits. Set new goals on how much you want to save and try to allocate a certain amount of expenses. When you've paid off your debt, use the funds leftover to open a high interest savings account. If you want to go a step further, you can open a term deposit to fix your interest rate.

ways to save money

Reap the rewards

If you're a rewards hoarder, the end of financial year sales is a great time to earn points by paying with your credit card. The key here is to make sure you pay off your balance before the interest kicks in. Redeeming your points for rewards can offset everyday costs if you redeem for gift cards or cash back options.

Gold credit cards can offer you this plus more. Compared to basic cards they have more benefits and features and the majority of them are linked to rewards program.

About a Gold Credit card

Shop online for more discounts

Aussies may be forking out more on international fees with their credit card when making purchases overseas. For instance, a USD$500 purchase would incur a foreign transaction fee of 3% which is $15 - but there are cards on the market that offer no foreign transaction fees. Otherwise, try to avoid these transaction fees by sticking to Australian retailers, but if you must buy internationally websites like finder.com.au Deals can help you compare deals both domestic and overseas. Our ASOS Deals page gets a lot of interest. And we're constantly looking for more deals to help you save with up to 70% off and free shipping - our range is constantly expanding so be sure to check our page regularly for the latest offers.

Shopping isn't just restricted to retailers - the new financial year may be the ideal time to compare credit cards on the market and switch to a new card. Credit Card Finder offers exclusive deals so it may be worthwhile to compare and see if a new credit card will better suit your spending habits.

There isn't much time left until the end of the year, now is the time to take action and continue the trend of saving your money and reducing credit card debt in Australia.


Jeremy Cabral


*The accuracy of this calculation and it applicability to your personal financial circumstances is not guaranteed or warranted. It is intended solely for general information and educational purposes.

Jeremy Cabral

Jeremy is a publisher for finder.com.au, he is also a personal finance all-rounder specialising in: Credit Cards, Savings Accounts, Personal Loans, Home Loans & Online Shopping.

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