
Get exclusive money-saving offers and guides
Straight to your inbox
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Paying less interest and fewer fees makes the idea of consolidating your credit card debt into your home loan attractive but you have to make sure you structure the consolidation in a way that doesn't end up costing you more. As most home loans are for a period of 30 years and credit card debts are for the length of time that it takes you to pay it off you may end up paying more as you will be paying off your smaller debt for a longer period time.
Before you look at consolidating your credit card debts into your home loan and therefore extending the period in which you pay it off read our tips below on how to pay off your credit card.
When it comes to consolidating your credit card debt into your home loan asking one of the big four banks will likely get a yes, a banking insider claims. The insider alleges that banks are pushing their staff to encourage customers to take on more debt despite them not being able to pay the debt back.
The banks are hoping customers spend up to their credit limit and then roll those debts back into their home loans. The scheme leaves many borrowers with debts bigger than the value of their house.
A 2011 Finance Sector Union (FSU) survey that found 51% of bank staff had seen customers being steered towards a product they did not need. The FSU said banking staff who did not meet sales targets could be fired.
In an exclusive Herald Sun interview, the Victorian bank insider revealed tricks staff use to get mortgage holders locked in a cycle of debt.
The insider claimed that:
The bank insider, who spoke on the condition of anonymity, alleges that banks wish to put home buyers into severe mortgage stress. 'The common argument that's used is that if you don't use (the extra credit card) it won't cost you anything,' he said. 'They are loading people up with credit because they know they will use it. I have people ringing me up a couple of times a week saying I need to roll some credit cards into my loan and tidy up the house,' he added for emphasis.
However, banks like NAB, ANZ, Commonwealth and Westpac said they were responsible lenders. Australian Bankers' Association (ABA) chief executive Steven Munchenberg said cardholders could refuse the offers and insisted banks were only offering the extra cash to customers who could afford it.
'An offer of a credit card limit increase is just that - it's just an offer,' Munchenberg said. 'And customers can choose to accept or decline the offer.'
The big four banks all rejected the banking insider's allegations, adding that they had obligations under the National Consumer Credit Protection Act.
People need to be savvy with their finances and realise that an offer to jump into credit quicksand is just an offer. Discipline should prevail in all financial decisions. Understand that a mortgage is for a home and not for any other purpose. Lastly, credit card and other debts are best settled separately.
It's always important to seek professional advice when consolidating debts - consider speaking to a mortgage broker in regards to your personal finance.
Credit cards are being used less and experts say Buy Now Pay Later services such as Afterpay and Zip are to blame, according to new research from Finder. In this month's Finder RBA Cash Rate Surveyâ„¢, 39 experts and economists weighed in on future cash rate moves and other issues related to the state of the Australian economy.
Follow these tips to get a handle on your credit with this free tool.
Pay no interest on your credit card debt and clear it faster with a 0% balance transfer credit card. Compare and apply here.
The recession is apparently over – but what does this actually mean for your money, and what impact does it have on your savings, loans and investments?
Get your credit card debt sorted before the holiday season and save on interest for up to 30 months with one of these credit card offers.
Get an introductory rate of 7.9% p.a. on purchases and balance transfers for 6 months and save with an ongoing $0 annual fee with the Health Professionals Bank Credit Card.
How to cut debt and make your credit card work for you.
Understand your credit score with the Finder Financial Fitness Challenge.
Only half of Australians who find themselves buried under out-of-control credit card debt could dig themselves out, according to Finder.
Both buy now pay later plans and credit cards give you ways to pay off purchases over time – here's how they compare.
Which lenders offer mortgages on houses on acres? Specifically, on land > 16 hectare (non commercial)
Hi Bruce,
Thanks for your question.
There are some lenders in Australia that may be able to help you. You can speak to specialist rural and agricultural lenders for different types of acreage and rural property purchases.
I also recommend getting in touch with a licensed mortgage broker. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that is more inclined to review your application.
Cheers,
Shirley