What is financial counselling all about...

Rene Ploegmakers, Financial Counsellor Team Leader for Diversitat has put together a case study to give you an idea of what our Financial Counselling team does...

More than $20 billion is sitting in superannuation funds waiting to be claimed.  Currently more than one in five Australians has “lost” capital sitting in superannuation funds, the result of people changing their name, address or job and who cannot be located by their fund.  The Australian Taxation Office considers a super account lost if there has not been any contribution received for two years or if mail sent from your super fund is returned unanswered twice.

Retrieving super doesn’t have to be a difficult process.  The Australian Taxation Office has a website that requires your name, date of birth and tax file number to identify any money that is held in your name.  Alternatively there are some providers who will search for your super on your behalf, but they will almost certainly charge a fee, which may be percentage based.

A refusal of credit by a bank or other financier can be for any number of reasons. It is the credit providers right to refuse credit, and they do so regularly. Their decision is often based on your ability or otherwise to service a debt. After all, it is a requirement of the National Consumer Credit Code for lenders to make "reasonable enquiry" into your capacity to repay a loan without hardship before they can advance the funds.

Also working against you can be your credit listing, which can detail missed loan payments, exceeding the credit limit on your card[s] or a high number of loan applications. Despite popular belief, there is no such thing as a good credit rating. Positive credit reporting is not undertaken in Australia, so the fact that you have never missed a payment on your credit card or personal loan will only be known by the institution which provided you with the credit. If you've never borrowed money, you probably won't have a credit listing, but that doesn't mean you won't be able to access credit. A strong employment record is regarded favourably, and credit providers love to see a regular savings history. Lending money is what banks do – it makes them millions of dollars in profits every day.

If you believe you have been refused credit for no good reason, it may be in your best interests to access your credit listing to find out what the credit providers are basing their decisions on. It could be as minor as a phone bill or electricity bill that slipped your mind when you moved out of your last rental property, or you may have been the victim of identity theft where someone has accessed credit in your name without your knowledge. Sometimes credit listings can be wrong and defaults are listed in error. All of these scenarios can be corrected, with time and patience.

Linda Walker, Kaye Norris, Jocelyn McMillan- Financial Counselling and Consumer & Tenancy Advocacy team Diversitat.

When the Reserve Bank adjusts official interest rates, the focus is almost always on mortgage rates.  What seems to slip under the radar is the interest rates that banks and other credit providers are applying to credit cards.  The current average annual interest rate is around 16.6%, but some cards are as high as 29.9%, and at the other end of the market, there are cards available at around 10%.  For the people who pay the balance off each month and get to use the bank’s money for free, interest is not an issue.  However, if you’re carrying a credit card debt which you’re unable to pay off at the end of the month, you may want to consider a balance transfer.

Unlike mortgages and other loan products which can take weeks to transfer, a credit card balance transfer to another provider can usually be done within twenty-four hours.  You can use websites such as www.ratecity.com.au to compare interest rates and other charges to find the card that’s best for you.  Before you apply for the transfer, it’s worth asking yourself why you’re doing it.  If your intent is to get rid of your credit card debt entirely, make a commitment not to use the new card and to pay down as much of the outstanding balance as you can while the interest rate is at its lowest.  You might also want to check that your original account has been closed and cancelled.  If you want to keep using your credit card, be aware that the new provider may give you a higher credit limit, which could ultimately see you in more debt, and when the “honeymoon period” for the low interest rate ends, you could be in a worse position than when you started.  Getting rid of credit card debt can be hard work, but very fulfilling when you’ve done it.

You've just moved into your new house and unpacked the necessities like the kettle, coffee and cups, made up your bed and you're ready to collapse into it. Before you do, take the time to complete the Condition Report and make sure you get it back to the owner/agent within three business days. Keep the other copy yourself, along with your tenancy agreement and bond receipt.