ARE YOU SUFFERING FROM DEBT LAG?

Reception • Aug 15, 2018

Australia is a nation of international travellers. During 2016, a record-breaking 10 million Aussie residents travelled overseas on a short-term basis 1. That’s 41 out of every 100 of us!


It’s no wonder we often hear people say, “no matter where you travel overseas you’ll run into an Australian”.


Of course, the travel bug comes at a cost. So, the more you plan, budget, save and pay towards your trip BEFORE you travel, the better off you will be AFTER your holiday.


Nobody wants their dream trip to become a travel debt nightmare. Jet lag we expect but ‘debt’ lag should be avoided at all costs.



The potential cost of debt lag


A 2016 travel report2 claimed Gen Y was the biggest spending generation with a yearly holiday outlay of $11 billion.


Gen Y is also our new generation of property buyers, a generation which may be shocked to realise their overseas holiday adventures are severely denting any future home ownership plans.


All lenders assess your debt, repayment history and credit report during the home loan application process. A large travel balance could impact both your credit score and ultimately your ability to be approved for a home loan.


If you are a current homeowner, you don’t want to find yourself drowning in holiday debt or experiencing an unexpected shift in interest rates that leaves you struggling to meet your repayments.



How do you avoid debt lag?


Here are our top tips:


  • Planning is key. Create a holiday savings plan well ahead of your travel date. Look for early bird discounts.
  • Avoid peak season. Travelling during off-peak times may deliver extra savings.
  • Research exchange rates. If rates are favourable against the $AUD then load currencies on a travel card before you leave.
  • Consider all possible costs. It’s often the expenses you did not anticipate which sink your budget.



Managing debt lag


How can you pay off debt sooner?


There are a number of ways to manage credit card debt. Paying minimum repayments over a number of years is certainly not the best of them.


Contact us for a chat and we can help explore a debt management solution for your individual circumstances.


Whether you are an existing property owner or a potential future property owner, managing credit card debt will help protect your financial future.


  1. afta.com.au.au/AFTA Travel Trends Rort March 20172.
  2. Westpac travel report 2016

*Disclaimer: This article is generic in nature. All investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice.

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