Aussie Finance Blog

Australian personal finance news, tips and advices.

TransferWise Review: Money Transfers at True Mid-market Rates

by

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)

3 money-saving tips for buying a new car

by

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.

You can also get good deals in December as manufacturers push dealers to sell that year’s model before the calendar year ends. So think December and June for maximum savings.

Get a finance broker

You may have this idea that finance is not the best way to save money but the truth is that very few of us have enough money in our accounts to buy a car outright. And even if we did, taking that much out of your savings is a rather depressing thought.

No, your best option is to finance that new car and keep your nest egg intact. And saving money on your loan is a definite possibility if you use a broker like Stratton Car Finance. By using a broker, you could be cutting down costs right off the bat by avoiding dealer finance which is often overpriced and has unfavourable terms.

However, when you use a broker, they will find you a variety of competitive rates currently on the market giving you the option to pick and choose the product that suits you best. And once you have the finance arranged, you can head to the dealer safe in the knowledge that you have the financial side of the deal sorted. This puts you in position of power with regards to buying, and if you play your cards right, you may be able to squeeze a few add-ons as a deal sweetener. Something that a dealer might not do if they were doing you the ‘favour’ of arranging your finance.

Ask about demo models

Demo models are those cars that you take for a test drive, and that usually spend most of their time in the showroom. They are always tricked out with all the very best features, but at some point, the dealer will need to get rid of their demo model and bring in a new one. And that’s where you come in.

Ask the dealer if they have any demo models for sale. These cars offer incredible savings and often have very low kms on the clock. And while a decent demo model may not be as cheap as a base model, it will have all of those additional features so you’ll get way more bang for your buck.

Just be careful to check all handles, buttons, and levers as these will have quite a bit of wear and tear considering how many test drivers played around with them in the showroom.

So remember the next time you’re in the market for a new car – time it right, use a finance broker, and ask about the demo models. Use any one of these tips, and you should save a little money. Use all three, however, and you’ll be surprised at how much you can shave off the price of a new car. Maybe that leather interior you like so much is possible after all.

Contactless payments statistics in Australia

by

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?

by

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)

Five Reasons Why Reverse Mortgages Are a Good Option for Australian Seniors

by

Guest Post by Andrew Ford, CEO of Heartland Seniors Finance

People often ask me why am I so passionate about Reverse Mortgages. I guess many Australian seniors are either wary because of the misinformation and misconceptions that still linger in the market, or don’t see how someone can be so passionate about a ‘financial product’.

The reason that I love Reverse Mortgages so much is that I have seen firsthand what they can do for people. I have spoken to, and met with, thousands of seniors whose lives have literally been changed by a Reverse Mortgage. I think that’s pretty neat.

Am I overstating the impact? Life-changing?

I don’t think so – you just have to look at what you can do with reverse mortgages:

1. Reverse mortgages can improve your standard of living

When you stop working, your regular income will be significantly reduced. Relying on your pension or superannuation may not be enough to sustain a comfortable lifestyle. Remember, superannuation was only mandated by the Government in 1993. Therefore, if you started working in the 60s or 70s, there is a lower chance that you have gained enough fund for your retirement.

In a recent report from The Association of Superannuation Funds of Australia they noted that the Aged Pension only covers a third of what is considered to be a comfortable lifestyle in retirement.

Many Australians today don’t have enough money for their everyday expenses yet they live in properties that are worth hundreds of thousands. With a reverse mortgage, you can convert a portion of this equity, which you can use for aged care, home renovation, payment of debts, and many more.

2. Proceeds of reverse mortgages can be used for debt payment

No one wants to spend retirement still paying high-interest debt. But many seniors living on pensions are using credit cards if their funds are not enough. With a reverse mortgage loan, you can save money on repayments while getting peace of mind. Usually, seniors are no longer eligible for a mortgage or credit line, but with reverse mortgage you can access the cash you need to pay all your debt. Also, repayments for reverse mortgage are not required, so you don’t need to worry about monthly dues.

3. Reverse mortgage can fund your aged care needs

While government support is available to allow seniors to stay at home to receive aged care, the financial subsidy may not be enough to cover all expenses and depends on an asset test. Wealthier seniors may not be eligible for any home care service benefits. If you have been evaluated as capable of shouldering a portion of the home care services, your home care provider may ask you to pay first either a basic daily fee or an income-tested care fee before they provide you with assistance.

In reality, many seniors, especially those with reduced income may still struggle despite of receiving government subsidy. It’s important to remember the cost of retirement living could increase in the next few years. The rising prices of basic goods and increased expenditures for medical treatments can make it hard to make ends meet.

Taking out a reverse mortgage to assist with aged care services can give flexibility and breathing space for seniors and their families during a stressful period of change. The loan proceeds can also be used to supplement retirement income, regardless of the pension level, to cover home care costs not included in the government subsidy.

An aged care loan can also be used to fund residential aged care.

4. Realise your dream holiday

After long years of working hard and building your personal wealth, you now have all the time in the world to do anything you want. Why not realize your dream holiday this year? Nothing could hold you back, except if you don’t have the money to finance your travel and holidays, of course.

Rather than using your pension or spending your personal savings to fund your holidays, you can unlock a percentage of your home equity to access more cash through a reverse mortgage loan.

5. Considerable consumer protection

Reverse mortgages are probably the most heavily regulated consumer finance product in Australia.  As long as you adhere to the terms of the loan you are guaranteed to be able to stay in your home as long as you choose (lifetime occupancy), you can never owe more than the value of your sales proceeds of your property (no negative equity guarantee) and you do not have to make a repayment until the end of the loan, but are free to do so without penalty at any time.  Legal advice is mandatory and at Heartland our team and our accredited broker network work hard to ensure customers make an informed decision.

That is why I am a ‘true believer’ in Reverse Mortgages for seniors. I don’t think there is another financial product out there that has as much power to genuinely change lives people in quite the way a Reverse Mortgage can.

If you would like to see if a Reverse Mortgage is right for you or just to discuss Reverse Mortgages in general please feel free to give me a call – 1300 889 338.

You can also watch the animated explainer video below to get started with Heartland reverse mortgages:  (Video to be embedded on blogpost)

 

https://www.seniorsfinance.com.au/reverse-mortgage/how-a-reverse-mortgage-works

 

Andrew Ford, CEO, Heartland Seniors Finance

Andrew Ford is the CEO of Heartland Seniors Finance and has been with the Heartland group for over 15 years. He is passionate about reverse mortgages and the difference it can make to the lives of seniors.

Are There Loans For Weddings?

by

Weddings have always been special occasions worth celebrating in style. The tradition remains, and modern weddings are an opportunity for the bride and groom to shine. However, getting married is a huge step, and planning the event is a complex undertaking deserving a lot of consideration. The cost of a wedding can be overwhelming for couples who haven’t saved up for the big day, with dress, venue, catering, cars etc. all biting hard into the budget. A wedding loan could be the answer.

It’s not uncommon for a typical Australian wedding to cost more than $50,000 (see notes), and taking out a loan may be the best way to make ends meet and put on a wedding worth remembering.  Most large expenditures in life are made possible with the assistance of a loan. Whether purchasing a house or car, studying at university, investing, building, renovating, or getting married, funds are required. Wedding loans are among the most popular personal loans, and there are a variety of suitable loan types, dependent on financial circumstances.

Wedding loan options

Prior to determining your borrowing power, the bank or lender will need to know how you want to use the loan. They also need to understand your present financial situation regarding other loan repayments, outstanding debts, credit cards and living expenses. Wedding loan options are varied, along with respective interest rates and repayment schedules.

Personal loan: Wedding loans can be used to purchase a broad range of products and services. Some personal loans hold no restrictions on purchases, so money can be used for the wedding venue, catering, limousines and even the honeymoon. Variable and fixed loan options are usually available with repayments made from one to seven years.

Line of credit: If your finances are in reasonably good shape, your bank may provide a line of credit (overdraw limit) on your bank account. This is a good option if you want ‘just in case’ money available if the wedding plan goes over budget. Once money is accessed, a set interest rate is charged.

Home equity loan: Home equity can be used to fund a wedding. As an established bank customer, your long-term home loan repayments and increased value of your home means there is little risk for the bank. Additionally, home equity loans are tied to your home loan, providing much lower interest rates than other forms of wedding loans.

Credit card: Most types of personal loans for weddings carry lower interest rates than credit cards. But it you don’t have other options or are going after the rewards points, you might considering using a credit card for wedding purchases. Credit cards are a form of self-managed borrowing and by planning ahead, you can ensure your cards are in good shape and ready to tackle wedding expenses.

Wedding loan features

Lenders often provide discounts, incentives and flexible repayment options when personal loans and other financial products are bundled together. Flexible loan incentives include the facility to make early repayments, take out a loan extension, or make interest-only repayments during difficult times. Some lenders charge a fee for the convenience of making early repayments, so your choice of loan needs to take all associated conditions into consideration.

Fixed and variable interest rates both have benefits and drawbacks, although choosing the appropriate rate option is also determined by personal preference. A fixed rate gives certainty about repayments for the course of the loan, at higher interest rates, while variable rates are lower at the time of loan application, but are dictated by regional and global financial markets that can change unexpectedly. If you choose to forgo the loan option and instead use your credit card for major wedding purchases, it could be an opportunity to utilise rewards points for additional expenses.

Wedding loan considerations

Hosting a successful wedding is a big achievement, but when the confetti is cleared away and the honeymoon is underway, your first loan statement will be on the way. It’s important to understand the financial obligation of servicing a loan for the entire repayment term. Prior to taking out a wedding loan, there are questions that need answering.

  • What are the fees charged while establishing, maintaining, and servicing the loan?
  • What interest rate is being offered?
  • Are repayments genuinely affordable for the duration of the loan?

    • ... (read more)

    The most important question every Aussie needs to answer when they move overseas

    by

    If you are considering a move overseas, then there are numerous financial and tax implications you will need to consider.  However most of these implications are linked to one question you need to answer : Are you a resident or non-resident for Australian tax purposes?

    Many people incorrectly believe that just because they move overseas, that they are automatically non-residents for Australian tax purposes.  The Australian Tax Office takes a different point of view, and requires you to satisfy a number of tests before it will consider you to be a non-resident for Australian tax purposes.

    Before discussing how the Australian tax office will determine whether you are a resident or non-resident for Australian tax purposes, lets first understand the difference between being a resident and a non-resident.

     

    The difference between being a resident and non-resident for Australian tax purposes

    The major difference between being a resident and non-resident for Australian tax purposes is that if you are considered to be a resident for Australian tax purposes then all of your global income (from all sources) will be subject to tax in Australia.  If you have paid tax on any of that income overseas, you may be entitled to a tax offset (credit) in Australia.

    If you are considered to be a non-resident for Australian tax purposes then you will only pay tax in Australia on your Australian sourced income (primarily any employment and rental income you earn in Australia).  There are a numerous other tax differences for non-residents including:

  • increased capital gains tax rates on Australian property; and
  • no tax free income threshold (ie. You will pay tax on your first dollar of Australian sourced income)
  • different treatment of dividend and interest income in Australia.

    • ... (read more)

    Planning a Destination Wedding

    by

    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.

    Are Rewards Credit Cards Worth It?

    by

    In a world governed by finances, it’s often all too obvious that we need to make our own money work harder for us. Everyone likes to get the best possible interest rate or return on investments, with hard earned money tucked safely away. However, we also need to spend money, and anything saved at the point of transaction will reap rewards later on.

    All of us have the capacity to reap at least some gain from a rewards credit card. First, we need to understand the name and nature of the card. Rewards are gained over time, with good financial management, while the card is used for as many transactions as possible. A large number of Australians earn and spend sufficiently to justify owning a rewards credit card. At this point we need to be warned that any card payment default or late payment will incur a fee or other penalties that will nullify rewards earnings.

    Embed from Getty Images

     

    Choosing a credit or debit card

    There are more than 16 million credit cards in circulation around Australia. Some of these cards are accruing interest while others are harvesting only debt. Sound money management coupled with reasonable income is essential in avoiding credit card debt. Substantial rewards are unobtainable unless the card owner spends many thousands of dollars.

    A debit card, on the other hand, is ideal for people with a limited savings cushion to offset financial hardship. Debit cards are also accepted by major credit card companies as a payment option. They are extremely versatile and don’t incur penalties associated with credit cards. In fact, debit cards are the more popular card overall, with more than 40 million in circulation around Australia.

     

    Reaping what you spend

    By now it should be clear that rewards credit cards, although not elitist, are most profitable for people with plenty of spending power. This market share is still a fair percentage of the Australian workforce, with top earners utilising rewards credit cards to support their lifestyle or business. The flexible nature of rewards cards is what makes them a sustainable proposition. Rewards can be redeemed in the form of air points, gifts, accommodation, cash back and more.

     

    Rewards cards not for everyone

    Banks have a small financial margin enabling them to reciprocate with bank customers. It’s in their best interest to keep major customers happy. Rewards credit cards are equal opportunity, but the advantages are obviously skewed toward the wealthy. To put things in perspective, the average person needs to spend tens of thousands of dollars in order to receive only $200 in rewards.

    Annual card holder fees are also often much higher for rewards cards. Major bank rewards card fees can be $150 per year, while cards without a rewards scheme are closer to $30 per year. Add to this the high interest rate on outstanding balances of rewards credit cards, and we realise the commitment required to transform expenditure into savings.

    Embed from Getty Images

     

    A little research can pay dividends

    A comparison of major rewards credit cards reveals that they are only really useful in the hands of a big spender, or whoever else is in charge of the company purse-strings. Spending less than $30,000 per year will barely result in a profit after annual fees are taken into consideration.

    On the other hand, if we do the maths, it’s easily understood that accrued points can definitely be transformed into a value-added lifestyle.

    After all, if spending $30,000 results in a reward of $200, then spending 3 million dollars will result in $20,000 worth of rewards. Spending money to make money is definitely easier for the wealthy. Rewards credit cards are worth it, but for now, many of us need to make ourselves financially worthy to take advantage of the situation.

    It’s important to keep an eye on special offers, when new card applications receive a huge point bonus and sometimes the annual fee is waived for the firs year. Just this morning as I finished writing this post, Westpac released its new credit card offers and they give 50,000 points for new rewards credit cards and the first year is free. Based on my rough calculations, that 50,000 points worth around $242, which is not bad at all.