Credit Card Minimum Payments

Credit Card

Typically speaking, a credit card is a convenient substitute for cash allowing consumers to purchase goods or services.

Given Australia’s current credit card debt is a touch under $32 billion, it’s probably fair to say that the majority of card holders are either facing financial difficulty in repaying the debt or simply do not understand how credit cards work.

‘Putting it on the card’ seems the ideal short term solution to pay for a holiday, new car, shopping splurge or any other want that needs fulfilling. With a range of lender’s offering specials such as 0% interest on purchases or balance transfers, it appears a logical short term solution.

If you have ever found yourself attracted to such offers before, ensure you understand what interest rate your credit card will revert to after the intro period has expired.

Unlike most home loans which are charged daily interest on the applicable interest rate, credit card interest comes in various types such as;

  • Purchase Interest
  • Cash Advance Interest
  • Balance Transfer Interest
  • Interest on Fees
  • Special offer Interest Rates

Your particular credit card may charge varying rates of interest for the relevant transactions which can make it difficult to keep track of the interest being accrued.

Each month, you receive a statement from your lender which discloses the amount of interest accrued during that particular period and the minimum monthly repayment amount. Many people assume that by making this minimum monthly repayment, they will avoid being charged interest the following month. Wrong.

The minimum monthly repayment is generally determined as an amount between 2% – 2.5% of the outstanding balance or a fixed $ figure whichever is higher. Whilst this payment is enough to cover the interest charges, it doesn’t stop interest being accrued on the outstanding amount and more importantly, won’t help you pay off your card quicker.

Credit card debt of $1,000 at an annual interest rate of 18%. If the minimum payment is set at 2% of the card’s closing balance and that’s all you pay each month, it will take you just over five years to pay it off, at a total cost of around $539 in interest. And that’s only if you don’t make any new purchases or cash advances on the card. It doesn’t include the annual fee, either.

But if you committed yourself to paying $100 on your card each month, it could only cost you $74 in interest and you’d have paid it off in 11 months.

Credit Card

It’s an all too common situation people find themselves in believing they are doing the right thing by paying whats required. In order to avoid interest charges for the following month, the closing balance listed on the statement must be paid in full by the payment date. In order to pay down your credit card debt quicker (and avoid excessive interest), you need to be paying more than just the minimum each month.

Use the following link if you wish to calculate how much you could save by committing a higher repayment

Additional information used for this article via





Top 20 FHOG Suburbs

Top 20 FHOG Suburbs

In the June edition of the Office of State Revenue eNews, we can see a snapshot of the Top 20 FHOG Suburbs in WA between 1st July 2015 – 31 May 2016.

The current grants available to first home buyers currently remains;

– Up to $3,000 for the purchase of established homes
– Up to $10,000 for ‘new’ homes

*New homes applies to buying or building a new home not previously occupied

Contact your Wealth Plus Lending consultant or the Office of State Revenue for further information about First Home Owner’s Grant’s & exemptions.

RELATED ARTICLE – What are the benefits for first home buyers





Suburb Profile #1 – WANNEROO

City of Wanneroo

By Luke Tedesco

They say that in order to start you need to begin at the beginning. I have chosen the northern suburb of Wanneroo for my first suburb profile as this was the place I spent growing up.

Wanneroo is located approximately 29km north of Perth and has undertaken a significant facelift in the last 15 years. A quiet, spacious and rustic suburb, growing up in Wanneroo had a tremendous community feel to it. It has now transformed into a bustling and modern suburb which facilitates neighbouring suburbs Sinagra, Ashby, Hocking, Tapping & Mariginiup.

Wanneroo Central, Wanneroo Library, the City of Wanneroo and St Anthony’s Primary School have all been upgraded since 2000 and are all located in close proximity.

The sport & leisure centre located behind Wanneroo Central also undertook a makeover in recent times and its aquatic facilities are an integral community icon.

In 2014, Café Elixir was announced as the WA winner of the Foxtel LifeStyle FOOD Channel’s I Love Food Awards. This is a favourite meet up place for many local (and non-local) residents and continue to receive rave online reviews for its food, coffee and service.

The Wanneroo Agricultural Show is always a big community event and has been running for over 100 years highlighting the community’s rich heritage in agriculture, horticulture, livestock, hobbies, arts & crafts.

An abundance of parks, gardens and lakes gives Wanneroo a very relaxed lifestyle. The Wanneroo Botanical Gardens provide amazing scenery and is a popular wedding venue. It also has been a parents haven during school holidays with mini-golf also available.

Whilst growth rates have declined slightly in the past 12 months, Wanneroo has experienced a 5.2% growth over the past 10 years which is slightly above the Perth Metro Region average of 5.0%.

The suburb consists predominantly of houses (87%) with 75% occupancy either those who have purchased or own outright. For the past 12 months, the median price range sits at $455,000

Wanneroo is a recommended suburb for families with kids, those who like to be close to nature and looking for sizeable blocks of land.

Information used from REIWA, RP Data & Homely

How A Guarantor Can Help You Secure Finance


Parents & Child

Published by MFAA from

When you’re desperately trying to save up a deposit for a home and just see the prices of property climbing and climbing, it’s difficult to remain patient. But there is another way: a guarantor can help.

If you don’t have a substantial deposit for a home loan, there are still a number of ways to obtain credit. These are known as family pledges and there are two types available to borrowers: service guarantees and security guarantees.

Service guarantees are less common that security guarantees, explains an MFAA-accredited finance broker, and they involve a family member guaranteeing all of the repayments on a loan, as well as being named on the property title.

“A drawback of this approach is that it usually means first home buyers are not entitled to any government grants,” she explains.

A more popular option is a security guarantee. Borrowers who have a limited deposit often use this approach. In this situation, a relative or friend (usually a borrower’s parent or parents) is prepared to use the equity in his or her own home to guarantee the deposit of the borrower.

For example, for a total loan amount of $600,000, in a security guarantor situation the borrower/s would take on the debt of 80 per cent of the value of their loan, which would be $480,000, in their own name/s.

The loan for the balance, $120,000, is then guaranteed in the names of the guarantor/s and borrower/s, limiting the guarantor’s liability while providing security for the lender, meaning that lender’s mortgage insurance is not necessary.

“This is a very popular way of first home buyers entering the property market,” she says. “It works well when borrowers don’t have a substantial deposit, but their parents own their own home. It’s a great option as long as the parents are comfortable with their child’s ability to pay back the loan.”

To find a solution that will help you own your own home sooner, speak to an MFAA-accredited finance broker.

An MFAA Approved Finance Broker is much more than your average mortgage broker.

What are the benefits for First Home Buyers?

Money in Pot Plant

By Luke Tedesco

Stamp Duty, grant’s and concession’s. What am I entitled to as a first home buyer? Does it really make that much of a difference?

Yes. It does.

Considering how hard you save to build up a deposit, it can be comforting to know that there are a few additional bonuses you can benefit from as a first home buyer.

So what is Stamp Duty? The ATO defines Stamp Duty as ‘a tax on written documents (‘instruments’) and certain transactions, including

  • motor vehicle registrations and transfers
  • insurance policies
  • mortgages
  • transfers of property such as businesses, real estate and certain shares.

In Western Australia, Stamp Duty is charged on a tiered basis, similar to the different tax rates you pay on your income. For the purpose of this article, I will highlight the dutiable value range from $360,001 – $725,000 which is $11,115 + $4.75 per $100 or part thereof above $360,000

Dutiable value

$0 – $120,000   $1.90 Per $100 or part thereof
$120,001 – $150,000 $  2,280 + $2.85 Per $100 or part thereof above $120,000
$150,001 – $360,000 $  3,135 + $3.80 Per $100 or part thereof above $150,000
$360,001 – $725,000 $11,115 + $4.75 Per $100 or part thereof above $360,000
$725,001 and upwards $28,453 + $5.15 Per $100 or part thereof above $725,000

The Stamp Duty applicable on a $430,000 home would equate to $14,440. In effect the home you are purchasing is actually $444,440 and we haven’t even started with settlement and banking costs.

So why am I highlighting this dreadful expense? As a first home buyer, you wouldn’t have to pay any of it.

Stamp Duty is exempt for an established dwelling of $430,000 or less. There is also concessional rates applied if you purchased between $430,001 – $530,000. For vacant land purchases, the nil rate of duty applies to land purchases under $300,000. That is a significant benefit.

In addition to the stamp duty exemption, if you build or purchase a new home, you could be eligible to receive the First Home Owners Grant up to $10,000.

Under the  Real Estate and Business Agents Act, a home buyers assistance of up to $2,000 may also be applied for.

Remember these tips when planning your first home purchase as it could save you thousands of dollars which lets face it, is better spent on anything other than fees & taxes.

For more information including updates to eligibility, criteria and duties speak to a Wealth Plus Lending consultant today and visit the following sites;

The information provided in this article is accurate as of 4th March 2016.


The importance of getting a pre-approved loan

concept. paper figurine house in hands

concept. paper figurine house in the hands

By Pia Vogel from

So you’ve decided you want to get onto that much talked about ‘property ladder’ and you’ve already been busy trawling the internet for the perfect home. Looking for a new home can be an exciting and challenging experience. After all, buying a home is one of the largest investments you may ever make.
It’s good to keep a level head and be realistic about what you can afford. Most of us, when buying a home, will need to borrow money to finance the purchase. So before you go any further, you need to find out how much you can borrow.
When applying for a pre-approved loan you will need to provide some additional documentation, such as:
  • Proof of deposit
  • Proof of income
  • Monthly expenses and other outgoings such as loans, credit cards and store cards.
As long as you meet the requirements then voilà – you will have a pre-approved loan. So now the real house hunting can begin…
What are the benefits of obtaining a pre-approval loan from your lender? 
  • It’s FREE.
  • It’s valid for up to 3 months.
  • It gives you clear guidance on how much money you can spend.
  • You won’t be setting yourself up for disappointment if you think you can spend more than your lender agrees to lend you.
  • It shows your estate agent that you are serious about buying a home. Some agents won’t spend their time showing you homes in-case you don’t come through with the financing.
What are the conditions of pre-approval?
  • That all information supplied to the lender for assessing eligibility is true and correct.
  • That the lender has received all documentation necessary to verify deposit, security, assets, liabilities and income.
  • Verification of the personal and financial details.
  • The lenders satisfactory assessment (including a valuation) of any property offered as security for your client’s loan(s).
  • Whether Lenders Mortgage Insurance is required. If it is required (generally when the loan amount is for more than 80% of the value of the security property) the loan(s) will be provided only if the insurer agrees to provide the insurance. The borrower will also need to pay the Lenders Mortgage Insurance premium.
Once you’ve found your dream home, you will then need formal approval. Full approval of your loan can take as little as an hour or it may take a few days if valuations are required.
But before you apply for a pre-approved loan, make sure you are fully aware of the reason why loans are rejected. This way you can ensure you meet the criteria before applying – the last thing you want is lots of different loan applications appearing on your credit report!
What are the common reasons an application would be declined? 
  • You can’t properly document your income. 
  • Your credit rating is low. 
  • You have too many enquires on your credit file. All your loan applications will appear on your credit report. If there are too many this may you’re your lender nervous as they may think you are not telling the full story. 
  • Your situation has changed, for example you have recently changed jobs or got another type of loan. 
  • The policy of the lender has changed. Some lenders will honour pre-approvals that are lodged before their policy changes. 
  • Interest rates have increased; this as a consequence that the maximum amount that can be borrowed will decrease.
  • If your loan amount is more than 80% of the property value.  
So remember when deciding to take that leap of faith – along with 9 million other Australians who have already jumped on the property ladder, just remember to be prepared!
You need to take all your decisions seriously and take the time prepare yourself through every aspect, so that finding your dream home a positive and pleasant experience rather than a negative one.


It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That’s why it’s important to not only check the right rates, but make sure that you’re getting the right features in your home loan


Explainer: How Redraw And Offset Accounts Can Save You Money



January 28, 2016

Offset accounts and redraw facilities work in similar ways; they both allow you to reduce the balance of your home loan, and therefore the interest charged, by applying extra money to your debt.

Redraw facilities allow you to deposit spare income into your home loan account, allowing you to redraw a sum equal to the extra repayment amounts in future.

In the meantime, the extra money paid will lower the amount of interest charged while still giving you access to your money.


For example:



However, there may be restrictions on how much money can be withdrawn and when.

“For redraw, it depends on whether the facility applies to a fixed-rate or variable loan,” Moses says. “Most institutions only allow redraw from a variable-rate loan, or fixed-rate loan but with limited access.”

It is important to find out how a loan’s redraw facility works before taking it on, as the fees and restriction attached might outweigh the benefits of interest savings.

Deciding between an offset account and a redraw facility on your home loan largely depends on how accessible you need your extra money to be.

Offset accounts are like savings accounts that function alongside your home loan. You earn interest on the money in the offset account and you often have a debit card attached for simple withdrawals.

“Let’s say that you are paying five per cent interest on your home loan and earning two per cent interest on your offset account,” explains Heritage Bank NSW State Manager Paul Moses.

“In a offset setup, the difference would be 3%, but would mean that the 2% interest that you earn is coming off the interest you are paying on your home loan.”

With 100 per cent offset accounts, you earn interest equal to the interest you are paying on your loan. Rather than earning savings account rates, you are earning home loan account interest rates on the money held within the offset account.

“Let’s say you have $10,000 in your 100 per cent offset account. Instead of paying interest on your $100,000 loan, you are only paying interest on $90,000,” Moses says. “That’s probably the best type to have, if you are looking at offset accounts.”

Offset accounts, like many savings accounts, often come with account fees, but the fee may be worth the interest savings and the added flexibility compared to redraw facilities.

“There are less restrictions attached to 100 per cent offset accounts, they’re very flexible. But really, it does just depends on each lender,” Moses says.

Finding a loan that matches your needs is a lot easier with an expert on your side. Email to find a loan that matches your current needs and future plans.


What is ‘Negative Gearing’?

Jack Needham

(article shared from

Negative gearing – the media, politicians and investors love talking about it, but what does it actually mean and why is it an important consideration when devising your property investment strategy?

It seems that negative gearing policy is always hitting the headlines. Negative gearing can be an essential part of a property investor’s strategy – but it is important to understand the policy, how it should be used and how it can affect your buying behaviour.

What is negative gearing?
‘Gearing’ simply refers to borrowing to invest in an asset, be it property or otherwise. In terms of property, it refers to taking out a loan to purchase a property.

When an investment is negatively geared, it means that the interest paid on this loan is exceeding the rental income provided by the property – resulting in a loss.
This is opposed to when a property is neutrally geared, or positively geared. Neutral gearing refers to the scenario when the interest on the loan is equal to the income generated by the rental property in question.

When an investment is positively geared, it means that the income generated by the property exceeds the loan repayments on the property – resulting in a profit.

To give an idea of when a property would be considered to be negatively geared, let’s consider the example below.

Imagine you bought a $540,000 property and took out a $500,000 loan at an interest rate of seven per cent. The annual interest payable on the loan is $35,000.

Let’s also imagine that you are earning $530 per week in rent, which adds up to an annual rental income of $27,560.

Based on the above example, you are paying $35,000 in interest but only earning $27,560 in rent – resulting in a shortfall of $7,440 per year. In this case, the property is negatively geared.

Negative gearing policy explained
Many investors get into property investment to benefit from longer-term capital growth, but having an investment property in some of Australia’s more competitive real estate markets can often mean sacrificing a strong rental yield, and therefore making a short-term loss on an investment property.

The idea here is that as property prices increase rapidly (ie capital growth), rental prices fail to keep pace with this growth. In this case, investors are banking on making their money through the change in their properties’ values, rather than solely relying on the income generated from the rental payments they receive.

In Australia, negative gearing attracts a tax concession or benefit on both property and shares investments. When a property investor is ‘losing’ money on their investment due to the loan repayments, they can write-off the loss each year as a tax deduction – effectively reducing their taxable income and making up for some of the loss experienced.

In the case outlined above, the $7,440 shortfall would be removed from the investor’s taxable income. If, for example, their taxable income was $90,000, negative gearing would enable them to reduce this to $82,560.

Negative gearing can be used with other tax policies such as depreciation claims and related expense write-offs (such as property management fees) to bridge the gap between profit and loss each financial year. Depending on how significant the negative gearing scenario is, this may be enough to render the rental income deficiency inconsequential.
For information on how negative gearing should be calculated into your tax return, refer to the ATO website.

Why would an investor choose to be negatively geared?
In an ideal world, investment properties would provide solid long-term capital growth as well as a profit from rental income. Unfortunately, securing such investment properties can be a difficult process.

It could be that, in order to secure a property that promises impressive long-term capital growth, investors need to sacrifice short-term rental income and engage a negative gearing strategy.

This is particularly the case in capital city markets – where long-term growth drivers such as population increases, infrastructure projects and employment opportunities exist, but the sheer volume of rental stock and competition between investors means that buy-in prices are high and the ability to charge a rental rate that would provide an immediate profit is limited.

It may be that an investor decides that achieving this long-term increase is worth the short-term sacrifice, and so a negatively geared investment will work within their investment plan.

It is important to note that negative gearing is generally not designed to be a long-term investment practice. The idea is that investors will use the tax concession to limit the pain whilst they progress on the loan repayments outstanding on their property – until they reach a point where the property becomes neutrally or positively geared.

What are the disadvantages of negative gearing?
The disadvantages of negative gearing revolve largely around the income of an investor – indeed, your income will likely determine whether you can afford to buy a negatively geared property (and your tax bracket may influence how much of a benefit any deductions yield).

If you are on a low to mid-range income and are seeking to expand your property portfolio within a short period of time, holding a negatively geared property has the potential to limit your ability to save for your next deposit.

Remember that holding an investment property involves far more than simply meeting the loan repayments – and maintaining a cash reserve to dedicate towards property upkeep, or periods where the property is unoccupied, becomes a more difficult task when a property is negatively geared.

Holding several negatively geared properties has the potential to create financial stress associated with meeting repayments, and it places increased importance on the investor staying in their current employment or gaining a higher-paying job.

There is a degree of risk involved with negative gearing, and an increased onus on the investor selecting an area that will experience significant capital growth. The future returns on the property need to exceed the cumulative difference between loan repayments and rental income throughout the time of ownership.

If property values don’t move up, and rents don’t go up either, the investor will have sacrificed years of cash flow for little in return. For the sacrifice of holding a negatively geared property to pay off, the property needs to provide good long-term returns.

Is negative gearing here to stay?
The other big risk with choosing to invest in a negatively geared property for a long period of time is the amount of political uncertainty surrounding the policy. Australia is one of the only countries in the world to feature negative gearing as a taxation policy, and a degree of doubt exists over its longevity.
There are many arguments concerning whether the policy of allowing deductions on negatively geared property investments is good or bad for the real estate market at large.

Many proponents of the policy argue that it encourages investment in housing stock, increasing rental availability and driving construction employment.

Arguments have also been made that negative gearing adds an artificial level of increased competition to the real estate market – driving up prices for owner-occupier buyers, forcing them to remain renters and thus playing into the hands of ‘already rich’ investors.

The policy has previously been abolished by the federal government – in the 1980s – before being reinstated a short time after and it continues to feature prominently in debate surrounding taxation.

Your EDUCATION may be ‘FAILING’ you because…

Life Doesn't happen in exam rooms (2)

[Flashback] High school/ University Exam Period, late night study sessions preparing for your future, where you have that Tim Tams opened, messy hair and severe eyes bags.

[Now picture this] Full Time work. Bills, Groceries and Rent and those special window-faced envelopes that haven’t been touched for precarious reasons. You look at the date and you realized that Christmas is round the corner, not only do you need to think about presents for your loved ones but for those long lost relatives that we have to see at Christmas parties as well as wear those festive Christmas jumpers.


Check Bank Account to pre purchase flights for your best friend’s wedding. A thought popped into your head, ‘Did I even get paid? Where did all that money go?’


Richard Branson writes

Are young people being educated not to think?


RB future of education

In my editorial from the first Student magazine, I highlighted the need for real debate about outdated education models. “The fierce debates on education, surely involving the student more than anyone, are almost never thrown open to him. We plan to be a vehicle for intelligent comment and protest.”

RB future of education2.jpg




Student magazine fulfilled this aim, with lots of articles and discussion around education issues throughout its lifespan. We ran a humorous account of Alias Lamego’s experiences of education called ‘College Loaf’. More seriously, we ran an article called ‘Education Axed’ by Gavin Maxwell, the acclaimed author of Ring of Bright Water, who was a big influence on my own development.

“Man is a rational animal, whose opinions and ideas can be arrived at by rational processes of thought…” it began. “I contend that this claim could not be upheld, and that all civilised races of making are so thoroughly indoctrinated by their education as to render their intellects functionless. Each individual has to a greater or lesser degree, been brain-washed, although we prefer to use the word ‘educated’, and so have all nations at all times.”


RB future of education3


Gavin went on to question how teachers are often tasked with showing pupils how to learn facts, rather than truly use their brains and come up with new ideas. “The strictly scholastic side of a child’s education…consist in the main, of the ingesting of a vast mass of largely useless and uninteresting facts for dyspeptic regurgitation in subsequent exams.”


RB future of education4



He also ponders, back in 1967, how technology could already be holding back real education. “So, here is our educated man, living in an essentially technological world which actually contributes to the submissive, non-thinking condition upon which his whole education has been based. The higher the technology, the further the regression into the nursery world of toys and dreams of power.”

RB future of education5


While I think that technology has a huge role to play in improving education and engaging young people in learning, Gavin’s points about the education system’s obsession with stats and exams ring true. There should be far more focus on practical education and the development of skills to use used in everyday activities and business. Life doesn’t happen in exam rooms.



RB future of education6




Gavin Maxwell concludes: “The older generation is guilty – then and now – of educating its children not to think.”


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Advice on selling to close friends and family, Jack Ma (Richest man in China) shares his thoughts


Jack Ma, founder and executive chairman of Alibaba Group (one of the world’s biggest internet-based business) is China’s richest man and according to Forbes 18th richest person in the world with a net worth estimated at $24.1 billion (Wikipedia). Prior to his success, he failed his university entrance exam 3 times and only first encountered a computer 1997, aged 33. Jack Ma shares his thoughts as he once said:

‘When Selling to close friends and family, no matter how much you’re selling to them, they will always feel you’re earning their money, no matter how cheap you sell to them, they still wouldn’t appreciate it.’
There will always be people who do not care about your Costs, Time, Effort, they rather let other people cheat them, allowing others to earn, then supporting someone they know. Cause in their heart, they will always be thinking, ‘How much did he earn from me?’ instead of “How much did he SAVE/MAKE for me?”

This is a classic example of a poor person’s mentality!

How did the rich people become rich? One of the main reason is because they are willing to SUPPORT their associates business, taking care of one another’s interests thus naturally they get back more.

Your Friends will in turn support you, thus the circle of wealth continues to grow and grow!

Simple Logic, you will start to get rich once you understand it.

Jack Ma on Sales: ‘When doing Sales, the first people who will trust you will be Strangers, Friends will be shielding against you, fair-weather friends will distance from you. Family will look down upon you.’

The day you finally succeed, paying the bill for every get-together dinner, entertainment, you will realised: Everyone else is present except the Strangers.

Do you get the meaning of this?

We need to treat our dear Strangers better! And even more so to Friends who know what you are doing and yet still SUPPORT you!

Let us treat STRANGERS who buys from us better from today. They are your BEST customers!

Source: Charles J. Phua, a translator and insight writer. Linkedin