How to take advantage of interest rate cuts...

By Staff Writer
How to take advantage of interest rate cuts...

Considering the uninterrupted interest-rate cuts since December last year, we should all have some extra cash in our pockets. 

The prime lending rate has gone down considerably since December, but are you making the most of these cuts? 

Luke Hirst, MD of Debtbusters says ‘In these erratic financial times, any extra cash should be seen as a blessing and be spent wisely - especially if you are in debt.' 

Here are some valuable tips from the Debtbusters team to help you to utilise any extra cash correctly, putting you in a better financial situation. 

Clear expensive debt first: 

Remember: personal loans, credit cards and store cards are all going to vary in the interest rates they charge. While it is important to remain up to date with all your debt repayments, any extra cash you may now have as a result of the interest rate decrease would be best used by servicing your most expensive debt first. 

Remember - while you should never fall behind on any repayments, by paying in extra whenever possible, you can vastly decrease the amount of money you will pay and the term of your repayment. 

Take now, pay later? Forget about it! 

Swap your credit card for a debit card to make sure you only spend what you have. Yes, it is convenient to be able to take something now and pay for it later, but it makes for a budgeting nightmare. By using a debit card whenever you can, you will never spend more than you have and you'll avoid the added problems of interest on your purchases. 

Only save if you are making more than you owe. 

While the decrease in interest rates is great for the indebted, it also affects your prime linked savings accounts. If you put money into a savings account that is giving you 6%, aren't you better off using that extra money to service a debt that is costing you 15% interest? While saving is vital, getting out of debt should be your priority. 

Recent Articles

Featured Tax free savings accounts – Which offer you the best value?

This week Justmoney compares TFSA’s across the five banks mentioned to see which bank allows for the most savings potential and which is cheaper to utilise.

Read more

Are you liable for your spouse’s debt?

Marriage may signal taking on someone’s last name, family, and even traditions. But are you signing up to be liable for your spouse’s debt too? And if your life partner is made redundant or fired, will you be responsible for your spouse’s debt?

Read more

What happens to your medical aid when you move overseas?

While exploring a different country, you may rely on the built-in travel insurance that forms part of your medical aid. However, what happens when you stay for longer than a typical vacation? This week Justmoney has a look at what you should do with your medical aid if you decide to move overseas for a period of time.

Read more

How to apply for government funding for your start-up business

Starting your own business can be challenging, especially if you don’t have the capital to get it off the ground. Fortunately, there are many ways to fund a new business in South Africa. This week Justmoney found out more about these grants, how to apply for them, and what you can do to make your business stand out from the rest.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Free MBA Course

Price: Free
When: Applications close on 31 May
Where: Online

The 41 Winter Special

Price: From R170
When: Weekdays
Where: Cape Town

KFC Burger Day Special

Price: R97
When: Until 28 May
Where: Online