Covid-19 is the financial “wake up call” Aussies need, says Mozo

Ceyda Erem

14 Jul 2020

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Over the last few months, we’ve seen the Covid-19 pandemic affect all aspects of day-to-day life, from grocery shopping to heading into work. 

But according to new Mozo research, it seems like it may have had a positive impact on the way we think about debt. 

Before the pandemic hit, a considerable 67% of Aussies believed that debt was a ‘necessary part of everyday life’, but now one in four are reportedly working toward 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,” said 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 found that 68% of Australian households currently have some form of personal debt, like a credit card or personal loan, while 73% of those with debt are concerned about the level it has reached, with one in five unsure how they will repay it. 

Other financial goals Aussies are keen to work on include building an emergency savings fund, spending less on non-essentials and no longer spending beyond their means. 

Taking the first step toward banishing credit card debt 

Although credit card balances have fallen by 8.5% in the last two years and the average balance sits under $2,000, many Aussies may be in the dark about making their first move. 

One option may be to take out a balance transfer credit card. These allow you to transfer the balance of your current credit card onto another with a 0% interest rate for a certain period of time. This potentially allows Aussies to save a bundle in interest. 

In fact, following a Mozo number crunch using the average credit card debt ($4,200) and a typical interest rate of 16.88%, a balance transfer card with a 0% interest rate could deliver savings of up to $560 over 12 months.

However Lamont has warned that in order for a balance transfer card to be effective, Aussies will need to have a repayment plan in place to avoid being stung by interest. 

“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,” said Lamont.

If you’d like to find out more about how balance transfer credit cards work, check out our handy guide

Or if you’re ready to eradicate your credit card debt once and for all, head on over to our balance transfer credit card comparison tool!

Compare balance transfer credit cards - rates updated daily

  • Promoted

    CUA Low Rate Credit Card

    0% p.a. for 13 months and then 21.74% p.a.

    11.99% p.a.

    $49 $0 in the first year

    0% balance transfer rate for 13 months and up to 55 interest free days. No annual fee for the first year and $49 after.

    • 11.99% p.a.

    • -

    • 0% p.a. for 13 months and then 21.74% p.a.

    • 21.74% p.a.

    • 55

    • 0.0

    • 3.40%

    • $49 $0 in the first year

    • $12.50

    • 2.00%, Min $3.50

    Read our Mozo Review to learn more about the Low Rate Credit Card

    Details Close

  • Promoted

    Bankwest Breeze Mastercard

    2.99% p.a. for 9 months and then 12.99% p.a. (0% balance transfer fee)

    0% p.a. for 15 months then 12.99% p.a.

    $79

    Enjoy 0% interest for 15 months on new purchases then 12.99% p.a. thereafter. $79 annual fee. Limited time only. Fees, T&Cs apply. New Breeze Mastercard customers only.

    • 0% p.a. for 15 months then 12.99% p.a.

    • 0% p.a. for 15 months

    • 2.99% p.a. for 9 months and then 12.99% p.a. (0% balance transfer fee)

    • 21.99% p.a.

    • 55

    • 2.95%

    • $79

    • $25.00

    • 2%, Min $4.00

    Read our Mozo Review to learn more about the Breeze Mastercard

    Details Close

  • Promoted

    Apply By 30 September 2020

    Qantas Money Qantas Premier Platinum

    0% p.a. for 18 months and then 21.99% p.a.

    19.99% p.a.

    $299 $199 in the first year

    0% p.a. for 18 months on Balance Transfers, reverts to cash advance rate thereafter. Earn up to 80,000 bonus Qantas Points: 20,000 points each month for four months when spending $1,500 or more on eligible purchases (T&Cs apply).

    • 19.99% p.a.

    • -

    • 0% p.a. for 18 months and then 21.99% p.a.

    • 21.99% p.a.

    • 55

    • 199.0

    • 3.00%

    • $299 $199 in the first year

    • $30.00

    • 3%, min $3.00

    Read our Mozo Review to learn more about the Qantas Premier Platinum

    Details Close

  • Promoted

    Bankwest Zero Mastercard

    2.99% p.a. for 9 months and then 17.99% p.a.

    17.99% p.a.

    $0

    No annual fee and up to 55 days interest free on purchases. Get a notification before your minimum payment is due by setting up Easy Alerts in the Bankwest app.

    • 17.99% p.a.

    • -

    • 2.99% p.a. for 9 months and then 17.99% p.a.

    • 21.99% p.a.

    • 55

    • 2.95%

    • $0

    • $25.00

    • 2%, Min $4.00

    Read our Mozo Review to learn more about the Zero Mastercard

    Details Close

  • Promoted

    Apply By 31 August 2020

    Citi Rewards

    0% p.a. for 26 months and then 22.24% p.a. (1.50% balance transfer fee)

    21.49% p.a.

    $199 $0 in the first year

    0% per annum for 26 months on balance transfers. No Annual Fee for the first year then $199 each year after. Complimentary International Travel Insurance.

    • 21.49% p.a.

    • -

    • 0% p.a. for 26 months and then 22.24% p.a. (1.50% balance transfer fee)

    • 22.24% p.a.

    • 55

    • 0.0

    • 3.40%

    • $199 $0 in the first year

    • $30.00

    • 3.5%, min $3.50

    Read our Mozo Review to learn more about the Rewards

    Details Close

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