If we had things our way, the world of finance would be a simple and easy place. Unfortunately, there are a lot of things you need to research and consider before making a move with your money. One of those is your interest rate. But wait - there are different sorts of interest rates, and it’s important you get them straightened out when you’re looking for the most competitive deal.
Even if you’ve only dipped a toe into the financial world so far, you’ve probably come across the term ‘variable interest rate’. It’s one of the most popular types of home loan rates and is available on just about any banking product you can think of.
Got a nice rainy day fund built up? It might look even nicer with the effects of compound interest. If you’re wondering how much you’re earning thanks to your compounding interest payments - or how much you might be with the right savings account - then read on for a rundown of how to work it out.
We love it when things are made easier, don't we? It's perhaps why the mantra for buy now, pay later is that it’s for anyone who values convenience. The idea of convenience is always attractive, especially when it means the initial cost of an item in your online cart is one-quarter of the price tag.Proponents of BNPL say that spreading your purchases in this way can be done without incurring any additional fees, too. It sounds too good to be true and for the Monopoly champs among us - those who can simultaneously budget and swallow up the row of green squares - buying now and paying later is surely very satisfying.But for the less skilled with a dependence on, shall we say, Chance, what do you need to know?Well, firstly BNPL has become the preferred payment option in many shops. You’ve probably seen various provider logos at the checkout of your favourites. This placement of brand names like Zip, Afterpay and Latitude seems to represent an evolutionary step in the retail experience. I think this, at least in part, is why the early adopters and Gen Z shoppers have jumped onboard - there is undoubtedly a coolness factor and currency to it all (pun intended). However, the Australian Securities and Investments Commissions (ASIC) probably isn’t all that concerned with what’s cool. To this end, ASIC’s recent review of the sector highlights that while buy now pay later has been embraced as easier, some consumers are also too easily missing payments.As a result, they’re paying late fees and are struggling to meet other financial commitments. The real point of contention around this, says ASIC, is that BNPL people have designed the offering as cost-free or low-cost, but perhaps haven't considered all outcomes. In short, some consumers aren’t up to the task of paying by instalment and don't fully weigh up their future financial position. So given the propensity for some to miss payments, this is becoming trickier to navigate. Still, BNPL continues to grow in popularity and so we need to think about its place in the landscape of financial products. Is it practical? What’s its future?