Mozo Mythbusters: Episode 1
Article by Mozo
There are plenty of money myths out there that are costing Aussies thousands of dollars every year. Today we are tackling three of these long-held untruths...
Myth #1: Refinancing is a minefield and isnâ€™t worth the trouble
Many people know there are better home loans out there, but the thought of jumping through all the necessary hoops, as well the threat of exit fees mean this knowledge is too rarely acted upon. The truth is that switching to a cheaper home loan will almost always cover the cost of exit fees. In fact, most exit fees disappear completely after youâ€™ve had a loan for 5 years.
The proof: switching a $300,000 home loan (repaid over 25 years) from a CBA Standard Variable loan to a could save you an unbelievable $82,772 over the life of the loan.
Myth #2: Transferred money doesnâ€™t earn interest when moving between accounts
Even though your account doesnâ€™t always show the transferred money immediately, you do earn interest on the funds as soon as you transfer. That means itâ€™s always better to have your money in a high interest savings account than your bank account.
Solution: put down the calculator and open up a fee free savings account. Check out the RaboDirect 6.50% .
Myth #3: Reward credit cards are always worth the extra fee
The prospect of a free international flight, 5 star hotel room or an awesome blender is very hard to resist, but the truth behind many rewards credit cards is far less glamorous. Indeed, when annual fees are taken into account, many cards actually leave you worse off.
The proof: if you spend $14,000 a year on your card (the Aussie average), Mozo's Rewards Revealer shows there are 20 cards that will leave you in the red. Far from rewarding.
The caveat: chosen wisely, and paid off in full each month, some rewards cards can be just that. Check out this Mozo exclusive offer: apply for a and receive 20,000 bonus Velocity points and 4 free flights a year.
Know of a myth that the Mozo team could crack? Tell us on Answers