Aussie Finance Blog

Australian personal finance news, tips and advices.

3 money-saving tips for buying a new car

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That new car smell, the smooth ride, the envious look on your neighbour’s face, the empty savings account … hang on, that’s not right. There are certain things that make buying a new car worth it, and an empty bank account certainly isn’t one of them. But you know what? You really don’t need to spend as much as everyone else does for a brand new car and here’s how you go about it.

Time it right

The time of the year can be a massive factor in how much (or how little) you pay for your car. Choose to buy your car towards the end of the financial year, and you could secure yourself a very nice deal. You see, at this time of the year, dealers are eager to hit their sales targets for the year or to beat last year’s record. Whatever their motivation, there’s no doubt that they are much quicker to offer cut-price deals or throw in free extras at this time of year. ... (read more)

How to choose the best mask for bushfire smoke

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Post updated on 11 January 2021 with new product info.

Smoke mask is not a topic I would normally write about but given the circumstances (large bushfires in Australia), I think it’s important that we talk about the risks and options we have to protect ourselves and our family (including our pets). Scroll down if you are interested in the smoke masks only. I also found a smoke mask for dogs.

Protect Your Family from Bushfire Smoke

It was nearly the holiday season and the end of 2019 was just around the corner. But with dozens of bushfires raging all across the country, Australia was in a state of crisis. South Australia shut down more than a hundred schools due to a catastrophic fire warning and even those further away from the actual flames were suffering from the effects of wildfire smoke. ... (read more)

How to Choose an Air Purifier for Bushfire Smoke

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Last updated on 11 January 2021 with new product info.

There are the dismal statistics we read about the direct effects of bushfires that burn for months in different parts of Australia. Australia is often severely affected by bushfire smoke that’s blanketing the country. There have been instances of asthma, breathing difficulties and other respiratory ailments in Sydney and other cities. People have been advised to stay indoors to avoid exposure to bushfire smoke. But while commercial buildings are equipped with HVAC systems that have filters, homes aren’t always equipped with such systems that protect family health. This is why home purifiers have been in high demand for most people lately. ... (read more)

The five things you need to know about calculating your children’s cost of child care

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Working out how much you will have to pay for child care is one of the most important parts of the early stages of choosing a centre for your children to attend. 

Costs of care can vary widely but most families across Australia will qualify for some Government relief, with the actual amounts received depending on your family’s personal circumstances. 

The following five things are essential to know as you work out precisely how much support your family is eligible to receive.  ... (read more)

Choosi’s Cost of Love Report: Insights into Modern Australian Wedding

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Marriage has been a pillar of society for centuries. Most young Australians still support the concept, but financial concerns have made them more apprehensive about having large, traditional marriages.

Choosi recently released its Cost of Love Report. The purpose of this report was to understand the views Australians hold about marriage and the decisions they are likely to make.

Some of the core findings are listed below. ... (read more)

TransferWise Review: Money Transfers at True Mid-market Rates

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Picture this: You just land a great job, but it’s in a different country. You make the necessary arrangements, and you move there. Problem is, you need to send money back to your country regularly, maybe to pay for a mortgage, a phone bill or your family’s expenses.

Come payday, you calculate your budget and come up with the money you need to send before visiting the bank, only to find out that you lose a significant chunk of money to the bank by sending it. This is because banks do not follow the mid-market rate. ... (read more)

Planning a Destination Wedding

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Compensation for this post was provided by OzForex Limited ABN 65 092 375 703 (trading as OFX). Opinions expressed here are my own.

Destination weddings have grown in popularity and are no longer just for the fortunate few. People travel more than ever, airfares are great value and the overseas destination could even be closer to home for some relatives. With the right advice and sound money management, planning a destination wedding becomes a very real possibility.

Australians are spoilt for choice when it comes to destinations. The entire South Pacific is located conveniently on our doorstep, and wedding groups appreciate the value and facilities of the resort islands. The lush surroundings and warm waters provide many wedding locations worth investigating.

Lots of people meet their future partner and even marry while travelling overseas. Europe and the United States are also favoured for destination weddings, and although more expensive, can also be the convenient option for some guests.

Planning a destination wedding isn’t difficult once you understand your own limitations. You will need to coordinate offshore wedding arrangements and financial transactions, so making certain your investment is in good hands is the first priority.Securing your wedding investment

A destination wedding usually involves purchasing a wedding package or using the services of a wedding planner. Wedding packages, often associated with larger resorts, can seem too formulated, but the exotic or exclusive setting should satisfy just about everyone.

A wedding planner, on the other hand, is able to tailor the wedding to your personal needs. It’s often best to hire a wedding planner who lives locally, speaks the language, and has existing relationships with vendors and service providers.

A destination wedding doesn’t need to be complicated, and neither should an overseas money transfer.is OFX money transfers are among the most popular, offering 55 currencies and paying to 190 countries around the world, with the ability to track the progress of your global payment.

Whether you need to send a one-off payment or staggered payments to various wedding suppliers, money transfers are normally completed in a couple of days, so it’s easy to keep a destination wedding plan on track.

The detailed wedding plan

Unless you have experienced local contacts, a highly competent wedding planner will be essential to get the most out of your budget. The destination is just the setting, and for the wedding to become all that it can, your spending and money transfers need to be targeted and secure. A wedding planner can assist in many ways, including:

  • venue hire and decoration
  • guest reception, limos, accommodation
  • photographer, DJ or band
  • catering, organising the wedding cake
  • coordinating the sequence of events on the day of the wedding
  • ensuring local events or other festivities don’t conflict with your chosen wedding day

The wedding can even become an extended vacation that takes full advantage of your chosen destination. Consider sailing, diving or day trips as an additional attraction for everyone’s enjoyment. An OFX money transfer can cover it all, or be used specifically for destination wedding essentials. This flexibility keeps you in control of spending and provides opportunity for extra spontaneity and vacation-style adventure.

Start planning early

There are lots of reasons why people choose a destination wedding. For some it’s an idyllic dream, while others have cherished memories of a favourite place. The location could be perfect for both sides of the family, or just a great way to do something a little different, create a party atmosphere, and soak up some tropical sun.

The earlier you get moving with the wedding plan, the easier it will be for your guests to make arrangements. Plan ahead to secure your dream destination wedding location, and send invitations out well in advance of the wedding day. If some guests aren’t able to attend, it’s worth considering hosting a second ceremony back home at a later date. In some cultures, this is already the expected practice.

The favourable climate of competitively priced accommodations, cheap international travel and secure money transfers is an opportunity worth taking advantage of. Destination weddings are now within reach of most couples hoping for an enchanting experience like no other.

For more information and to read OFX’s Product Disclosure Statement, please visit the OFX website.

Australian Car Sales for August 2014

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The automotive market’s performance is not closely related to personal finance, unless you’re planning to buy a car or work in this industry. My article tries to summarise the latest statistical repots.

Based on the monthly and yearly comparison reports of the Federal Chamber of Automotive Industries (FCAI), car dealers are having a tough time in Australia, especially in WA. The national year-to-date (YTD) average declines in vehicle sales was -2.5% in August 2014. Western Australia is leading this negative list with -8.3%, followed by Tasmania and Queensland with -7.1% and -5.4%, respectively.

The report doesn’t have state specific statistics about vehicle types, but in overall “passenger” vehicle sales decreased by 5.4% year-to-date, as well as light and heavy commercial vehicle sales. The only growth was reported in the SUV market, +3.7% year-to-date. The FCAI report has more details about the passenger type vehicles. Micro, light, small and medium categories decreased, while large, upper large and people movers increased YTD. The sports category had a 7.8% decrease.

In the SUV market, small SUVs had the best and only positive performance (+15.7%); therefore, the SUV market increased mentioned in the previous paragraph is due to the small ones. In overall, it’s not looking too good and it’s interesting to compare these numbers with the Australian automotive industry’s monthly product volumes. The FCAI website has data about the monthly production volumes and it can be seen that 14% less vehicles were built during the first two quarters of 2014 than the previous year. The product volume has been decreasing since 2013.

The tough market situation might be good if you’re planning to buy a car, because you have a better chance to get a larger than average discount from car dealers. As far as I know, car dealers make profit on service, not car sales, so you should compare prices and fight for a good discount.

Contactless payments statistics in Australia

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Last month I published an article about contactless payments and it seems like it’s a hot topics nowadays because Westpac released its Visa contactless payments statistics for 2017.

They claim that Visa payWave contactless payments increased to 325 million in 2017, which is a 25% uplift compared to 2016. There were 67 million more payments in 2017 than the year before.

In the first month of 2017, Visa reported more than 24 million contactless payments, which by the end of the year increased to over 33 million.

According to Westpac, contactless is the preferred payment method in over 90% of purchases and contactless generated more than 68% of the Westpac Visa cardholders’ total spend.

It’s also interesting to see that St.George Bank (which is owned by Westpac) has higher contactless usage rate than Westpac. The ratio of contactless payments was 95% for St.George Bank customers, while 81% for Westpac customers, which clearly shows the demographic differences between the two banks’ customers. Also, Westpac customers spend 40% more on contactless credit card payments than debit card payments, which shows that customers are comfortable to use contactless payment for more expensive purchases.

It seems like that the fast food industry is the leader in contactless payments (98%), followed by other kind of restaurants (96%), grocery shopping and discount stores (both 93%). Healthcare related payments had the lowest contactless ratio in 2017, only 59%.

There are quite a few brand and technology names in the contactless payments system but the two most widely used technologies in Australia are Visa payWave and Mastercard PayPass (a.k.a. Tap & Go).

I look forward seeing the 2018 report next year but there’s most likely an upper limit for contactless payments and they will never reach 100%.

Here’s a link to the Westpac contactless payments article.

Contactless Payments: How Do They Work?

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Are you someone who absolutely hates how long it takes to make a transaction using a credit or debit card? Do you worry about card fraud a lot? If so, you will love contactless payment systems, which involve the use of contactless cards, stickers, key fobs, mobile devices, and wearable gadgets.

In a nutshell:

  • It is secure. You don’t need to hand over your card to the cashier. For the entire transaction, the card never leaves your hand.
  • It is fast. You don’t need to enter a PIN or leave a signature for purchases under $100.
  • It is easy. You just need to hold the card close to the terminal.

Contactless payments make life a tad easier for the average consumer. 

History

Contactless cards have been available in Australia since 2006 but it only started to gain traction in the last few years. From the 7.6 million cards issued in 2010, the number grew to 18 million in 2014. With more and more retailers accepting contactless payments, the total number of contactless cards in Australia should reach 33.9 million in 2019, Timetric predicts.

Contactless technology has existed for a while. In fact, it was first introduced in the’90s. ExxonMobil’s Speedpass was the first ever contactless payment system, and it launched in 1997. As you can expect, this technology was pretty revolutionary at that time. Motorists simply had to wave their Speedpass whenever they had to pay for their gas at participating Mobil stations.

Not long after Mobil introduced the tech, BPAY came up with a payment system that allowed users to transact through a financial institution’s telephone or online banking facility. This was launched the same year Speedpass was introduced.

By 2004, tech companies Sony and Philips introduced new technologies to the payment method. Along with the Near Field Communication Forum, they designed a system that brought more security to near-field payments. This paved the way for a variety of wireless payments, including Google Checkout, which came out in 2006.  In the following year, payWave made new strides as it introduced a nearly seamless payment experience.

Contactless payment was introduced to mobile devices in 2011. The first cellphones that supported MasterCard PayPass or Visa payWave came out that year. With the widespread acceptance of mobile phones, tech giants and financial institutions made further endeavours to develop contactless mobile payment systems. And today, you can see this technology expanding to wearable tech.

 

How do contactless payment cards work?

Payment cards come with an embedded chip and a radio antenna that transmit information to and from the checkout terminals. These make it possible for consumers to wave their cards over point-of-sale terminals.

Although the payment procedure is contactless, brushing against a terminal won’t make you accidentally pay for someone else’s purchases. The card has to be held a few centimetres away from the terminal for a second or two.

Any of these cards can be contactless:

  • Credit cards. If you use a credit card for contactless payments, transactions will reflect on your credit account. Even when you have a savings or transaction account linked to the card, payments will only reflect as credit. Hence, you will have to pay back the borrowed amount within a certain period.
  • Debit cards. Contactless payments through debit cards will draw money from your transaction or savings account. If you want to use the money you have in your bank account, insert the card into an EFTPOS machine at checkout and then select savings or transactions account.
  • Prepaid cards. Transactions can only be drawn from the specific amount that you stored on the card.

Before you can make your first contactless payment, you must activate the feature by completing chip and PIN transactions. This ensures that you are the owner of the card. This step also serves as a security measure to lessen the risk of fraud.

This method is absolutely convenient for you since you won’t need to swipe your card on the terminal. For payments that are at least $100, you won’t even have to enter a PIN code nor will you have to leave a signature. But for purchases that exceed that amount, you are required to do either of those.

To make a transaction, inform the merchant of your preferred method of payment. You just need to follow the onscreen prompts and check the amount. Finally, hold the card a few centimetres away from the terminal and wait for a confirmation message, a blinking light, or a beep. These indicate that the transaction was successful.

A few of the major financial institutions that offer contactless payment systems today are Visa, MasterCard, Barclays, and JPMorgan Chase.

 

Which technology is predominantly used for contactless payment system?

Mobile devices, smartphones, and contactless cards typically use radio-frequency identification (RFID) to make transactions secure.

Other platforms such as Apple Pay, Samsung Pay, and Google Pay use near field communication (NFC). These systems are built using a technique called tokenization.

Apple, in particular, requires all the parties involved in the transaction process such as banks and payment methods to create two elements:

  • Also called a device account number, this 16-digit token is unique to every device.
  • Encryption Key. This is what formulates single-use signatures or cryptograms. For every transaction, a new encryption key is generated after a fingerprint has been scanned. Apart from providing an extra security measure for the user’s identity, this allows you to double check the retailer involved and the total amount of the purchase.

Both of these elements are installed into a chip, which the device’s operating system is unable to access. During a transaction, the device’s unique token and corresponding cryptogram are sent to the payment provider who checks if both elements match up. When they do, the sale is authorised.

This technology is similar to the way banks protect online accounts by giving their patrons time-sensitive codes. Though hackers may steal a token, they can’t use it without a cryptogram.

 

Is my card a contactless card? How do you know your card is contactless?

Contactless cards are available from several card issuers. American Express, for example, offers the contactless feature on most of its consumer cards and a handful of business cards.

You can tell if your card is contactless by checking the back. If it comes with the chip and is marked with the universal contactless symbol, then it is contactless.

 

Will retailers add surcharges on your purchases?

Contactless transactions may cost retailers more especially when you choose to pay with credit instead of by savings or cheque. Not all merchants will add a surcharge for card payments, but those who do may add a surcharge fee that’s between 0.5% to 1.5% of the amount of a purchase.

Know that businesses are prohibited by law to charge excessive surcharge fees on debit, credit, and prepaid card transactions. If you catch merchants doing so, report them to the authorities.

 

How long does it take for a contactless payment to come out of your account?

Depending on the bank, the transactions may show up on your balance two or three business days after. Some take as much as four days to debit from your savings account. Others take even longer.

 

Are contactless cards safe?

Compared to magnetic stripe cards, contactless payment cards are more secure.

Contactless payment systems are considered to be safer than conventional payment methods because data transmitted by these cards are encrypted, which can only be accessed by authorized contactless readers.

As already mentioned,  you can hold your card the entire time you make the transaction. Entering your PIN isn’t even necessary. Encryption technology protects cardholders’ data, making it nearly impossible to steal information during transactions.

Plus, contactless terminals can only make one transaction at a time. Each transaction must be completed or cancelled before another can happen. That means there’s no way you can double up on payments.

Despite such safeguards,  there have been instances of fraudulent transactions in Australia.  Forbes said that an Android app can bypass the built-in security of cards, clone the card within seconds and use the information to carry out fraudulent purchases. Apparently, scanners that anyone can buy online can also steal cardholders’ information.

Additionally, anyone that has a near field communication (NFC) reader can access information like the card number and its expiration date simply by moving close to someone with a contactless card.

Banks will routinely look into your transactions to check if nothing is out of the ordinary. They will automatically inform your or send you an inquiry if anything sticks out.

If the card is lost or stolen, inform your bank so they can block the card.  They may shoulder the costs if any fraudulent transactions occur, that is, if you ensured the card’s protection and if you notified the bank about the loss right away.

Tap-and-go frauds have been low in Australia. It’s costing about 2¢ for every $100 transaction, which is only a third of the rate of card fraud in the international scene.

 

Wallet for contactless cards: Is it necessary?

You can take the extra measures to prevent data theft. To protect your information, you can wrap your card in tin foil before storing it in your wallet or you can line your wallet with foil. If you want to look less paranoid, you can always purchase an NFC blocking wallet.

But is all of this necessary?

If you ask Richard Koch, Head of Policy for the UK Cards Association, he would probably tell you that there’s nothing to worry about. A few years ago, when this method of theft first caught the attention of mainstream media, he said that the technology only manages to obtain the card number and its expiry date, which have always been easily attainable. After all, this information is displayed on the front of a card.

According to Koch, most retailers require more than a card number and expiry date to process a transaction. Merchants usually ask for the card security code or the cardholder’s address as a precautionary measure. Retailers who fail to do so will be liable if any fraudulent transactions occur.

 

How much can you spend on a contactless card?

Contactless purchases have what is called a floor limit, the maximum amount per transaction. In Australia, banks such as ANZ have a $100-floor limit. As long as purchases don’t go over that number, you won’t have to enter your PIN. But for transactions that exceed that limit, a PIN is required.

Since this system doesn’t really require a signature or a PIN verification, banks typically set these limits. The amount also varies between banks.

What happens if you lose a contactless card?

Though the transaction process is very simple, contactless cards are protected in several ways.

If it gets stolen, the thieves won’t be able to use it to their hearts’ content. Banks often set a limit on the number of times a card can be used or the value of the transactions before a cardholder is asked to use the chip and PIN process.

Notify your bank as soon as you can if your card is lost or stolen so they can block that card. In case of fraudulent transactions, you may not be held accountable for the losses incurred, given that you took the necessary precautions to protect the card and to inform the institution as soon as you noticed it was missing.

 

How can you disable the contactless payment feature of debit cards?

You can disable the contactless feature of your chip card. If you own a Mastercard Tap & Go or Visa payWave, you can disable them through NetBank and the CommBank app.

Using NetBank, here’s how you can disable the feature:

  • Log on to NetBank.
  • Access Settings.
  • Click on the Security option.
  • Select Card Settings.
  • Choose card.
  • Lock the contactless card payment feature.

Using the CommBank app, here’s how you can turn off the feature:

  • Log on to the CommBank app.
  • Select the Cards menu.
  • Choose which card.
  • Click on the Settings badge.
  • Turn off the feature under security settings.

When you feel like using this again, you can follow the same procedures, but of course, you must activate the contactless feature at the very last step.

Though you might currently be apprehensive to try this out, society might eventually influence you to make the shift.

Contactless payment systems are becoming increasingly popular especially in Australia. In fact, in a study conducted by the RFi Group in 2016, Australia had the highest use of contactless cards among the 16 nations surveyed, including the U.S. and the U.K.

This isn’t surprising since both private and government sectors are interested in the technology. Recently it has been confirmed that New South Wales, Queensland, and Perth are trialling this payment method on public transportation. Meanwhile, Adelaide and Victoria are considering mobile payment methods for public transportation.

If you happen to live in these areas, maybe you should participate in this trial. The commute should enlighten you on how convenient and easy contactless payments are.

Sources:

 

https://thenewdaily.com.au/news/national/2018/01/31/public-transport-contactless-credit-card-app/

https://en.wikipedia.org/wiki/Contactless_payment
http://www.paymentscardsandmobile.com/debit-and-contactless-dominate-australian-payments-market/
https://www.finder.com.au/history-of-money
https://www.moneysmart.gov.au/managing-your-money/banking/contactless-cards
http://www.bbc.com/news/business-33637492

https://www.investopedia.com/articles/personal-finance/110716/what-are-contactless-cards-and-how-safe-are-they.asp ... (read more)