We don’t mean to alarm you, but Christmas is just a little more than a month away. As the silly season approaches, experts have warned shoppers against making silly financial choices.
Brendan Lacota, a lawyer from Moonee Valley Legal Services, told the Moonee Valley Leader that many of his clients find themselves trapped in massive debts after taking on payday loans. He said it’s not unusual for these people to have debt five to six times more than the original loan as they attempt to stay afloat during the festive season.
“We continue to see clients who have been caught in a toxic debt spiral, taking out payday loans from dodgy lenders at exorbitant interest rates just to make ends meet and to pay for essentials, like food and electricity,” he explained. “These lenders target vulnerable people and will often charge interest that far exceeds the initial amount of the loan.”
Financial analyst Paul Clitheroe says that on average, Australians spend an extra $1079 over the Christmas and New Year period on top of their regular expenses. He urged Australians to start thinking now about how they’ll cover that bill.
Mr Clitheroe said balance transfer deals were one option, but reminded consumers that revert rates can be as high as 19.99 percent if the debt’s not repaid during the interest-free period. Aleksandar Naumoski, wealth manager at Yellow Brick Road Kensington, cautioned against cash advances, which also accrue high interest.
One of the best ways to sort out your finances this Christmas is to book a free financial health check with Chase Edwards. We’ll take the time to honestly assess your finances and plan strategies to help you grow your wealth and secure your financial future. Call us on 1300 854 833 to arrange your free, no-obligation financial health check today.