8 weeks ’til Xmas: Gearing yourself up for a debt free silly season

8 weeks ’til Xmas: Gearing yourself up for a debt free silly season

Welcome to week 3 of our Santa Saver Challenge, where we show you how you can enjoy an interest free Christmas thanks to a 0% intro rate offer. Plus, we reveal the savings you can make by cashing in on your rewards points stash.

Missed a week?

  • In week 1 we looked at the ways you can set yourself up for success by opening a high interest savings account and the savings to be made by switching to a fee free bank account
  • Week 2 was all about the “do more with less” methods you can adopt for cutting back on the cost of Christmas like buying nothing new and making your own Christmas gifts

Interest saved by switching to a 0% honeymoon deal over 8 weeks – $117

At this time of year, the market is teeming with credit cards offering generous interest free “honeymoon” periods. In fact, at the time of writing, our database showed 32 card providers offering a 0% purchase rate for an introductory term. If you’d like to live without interest for a while, here’s a scenario that will show you the potential savings to be made:

Say you are signed up with a credit card with the average rate of 17.43% and have an average credit card balance of $4,369, switching to the Coles No Annual Fee MasterCard with a 0% rate for 15 months (then 19.99%) and a $0 annual fee, would save you $762 in interest over a year. Which btw in the 8 weeks leading up to Christmas, is a nice saving of $117.

To compare more 0% honeymoon deals, head on over to our interest free credit card hub.

Money saved by cashing in on your rewards points – $100

Have you accrued a nice pile of rewards points on everything from your weekly grocery shop to your fill up at the bowser? Well, if you aren’t planning on jetsetting overseas, a thrifty option could be using those rewards points for ticking some Christmas pressies off your list. Generally speaking store gift cards offer better redemption value than if you were to purchase items from the rewards program’s online store. Say you have 19,000 Westpac Altitude points with that you could redeem a $100 rebel gift voucher – something dad might like?

TOTAL POTENTIAL SAVINGS – $217

Extra tips for using a 0% offer the right way:

While an interest free honeymoon deal can be a great way to steer through Christmas free from the bite of interest, there are some things you’ll need to keep in mind to ensure you use the card the right way.

– Don’t make cash withdrawals: The 0% offer only applies to purchases, not ATM withdrawals. Instead you will be charged the high cash advance rate, which our database shows is on average 19.65%. Plus to make matters worse, the interest free days don’t apply to cash withdrawals.

– Only spend what you normally would. A shiny piece of plastic in your pocket that charges no interest could tempt you to splash out and spend more than you normally would on everything from Xmas lunch to gifts. So create a budget and decide on a set amount you will spend on each of your loved ones before you hit the shops.

– Pay the balance in full before the honeymoon period ends. Remember the interest free period won’t last forever and is likely to revert to a much higher purchase rate. So make sure you have the savings at hand to pay the credit card balance in full before the 0% honeymoon period comes to an end.

8 weeks ’til Xmas: Gearing yourself up for a debt free silly season was last modified: October 29, 2015 by Rebeccah Elley

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