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 Which one should you get first: life cover or a retirement annuity?

Financial planning can be a brain-racking process because it means making difficult decisions such as choosing the most suitable products for you. The one challenge faced by those who are financially constrained is which product to choose: life cover or a retirement annuity (RA).

Read more

Should you save or invest your money?

While saving means putting away cash for future use, investment involves purchasing assets which will yield good returns in the future.

Read more

Retirement annuities compared – pick the one for you

When selecting an RA you must know the type of annuity you are investing in. Retirement annuities are divided into two categories: traditional and new generation annuities.

Read more

Recent tax changes – how do they affect you?

In January this year, various amendments to the Taxation Laws Amendment Bill and the Tax Administration Act were announced. While some changes will benefit you, others could be to your disadvantage. Justmoney looks at how some of the recent changes will impact you.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Save R100 when you buy a tracker at Takealot

Price: R289
When: Daily
Where: Online

Pamper yourself and partner for less at Bakwena Day Spa

Price: From R999
When: Until 31 July
Where: Hartbeespoort

Pay only R35 for the new Nandos Boujee Bowl

Price: R35
When: Daily
Where: Nationwide