Ten Tips If You Are Cash Strapped For Christmas
If it looks like you are going to be on tight budget this Christmas, no need to worry, here are 10 tips to help you make ends meet this Christmas.
If you think you are the only one wondering how to make ends meet this Christmas, don’t worry, you’re not, with just a few weeks left until the holidays, many of us are working on especially tight budgets this year.
The good news is that there are plenty of ways to save cash in the build up to the holidays, so here are ten tips to save money.
1.Design A Tight Budget
If you know it’s going to be a lean Christmas, then designing a budget that fits your finance is an important first step. You should take into account the cost of presents, food and decorations etc, and do your best to stick to it.
Draw up a frugal Christmas budget – factoring in the cost of food, presents, decorations etc – and try your best to stick to it. To get things started, sign up to the Manage on a small budget goal.
2. Look To Celebrate On The Cheap
If you intend to celebrate Christmas by dining out, then scope out a place that is inexpensive and fun to do it in first. Don’t make the mistake of deciding on somewhere without considering the cost first, and running the risk that your bill ends up tearing your budget to shreds.
3. Always Compare Prices
If you are doing Christmas shopping, then always look for the best price for the items you want, and using price comparison websites is an easy way to find the best deals out there.
4. Hunt For Vouchers
Before you go out and spend money online, you should hunt for voucher codes that can more often than not, knock down the cost of your shopping bill quite substantially.
5. Look For The Cheapest Travel Deals
If you plan on spending Christmas with family or friends, then there are a ton of travel deals online, and spending time finding good deals is a great way to save a little moolah.
6. Buy The Cheapest Petrol
If you are driving up to see your friends or family this holiday season, then check out comparison websites like motormouth.com.au to find the cheapest petrol prices in your area.
7. Look For Secondhand Bargains
Before forking over for brand new Christmas decorations or an new chairs to fit loved ones or friends who are joining you for a meal, you should see if you can hunt down a second hand Christmas bargain for a few dollars. It’s all out there, everything from clothes, furniture and other gift possibilities.
8. Find Inexpensive Recipes
If the catering bill over the holidays is breaking the bank, have a hunt around for inexpensive recipes. There are a ton of recipes out there that are both nutritious and yummy, using less expensive cuts of meat.
9. Make Your Own Presents
You don’t have to be Michelangelo to be able to make a thoughtful Christmas present for friends or family, and it’s a great way to spend some time, and can save you a ton of cash.
10. Make Your Loyalty Points Count
Lots of people spend all year saving up their supermarket loyalty card points, and then splurge during their annual Christmas shop. Loyalty points from supermarkets tend to be worth more if they are spent online rather than at the supermarket. So make them count and spend your loyalty points wisely.
How To Do Online Christmas Shopping Safely
This year over 27 million people worldwide will do their Christmas shopping over the internet according to PayPal. That is not that surprising, it’s easy, convenient, and there is no need to deal with crowds or carry heavy bags home. Just a few points and clicks and your done, and after a few days your Christmas presents will be there on your doorstep.
Almost everyone these days seems to do some part Christmas shopping online. Some do it for convenience, and others do it because if you look hard enough, there are some great bargains to be had.
If you do plan on doing some part of your Christmas shopping online, you should strive to stay safe, and knowing the retailers that you buy from are legitimate is critical, otherwise you may end up with nothing, or worse still find that fraudsters have stolen your credit card details.
Here’s how to stay safe online this Christmas.
Is The Site Trustable?
One of the best ways to find the best deal online is to use online comparison tools, like money-au.com.au, except obviously for the types of things you are looking to buy.
Some of these tools however may direct you to the best deal from a retailer you have never heard of. So how do you work out whether the site you are buying from is legit?
The best way is to use a directory like shopsafe.com.au. or other such directories. Directories like Shopsafe gives the site a once over before listing them in their directory, testing prices, delivery and site security.
If the site you want to buy from is not listed does not necessarily mean that it is dodgy, it means that the onus is on you to investigate. You should check whether the site lists an Australian phone number and contact address, and you should perhaps call the number first to check whether someone real actually answers.
Security
If you are looking for signs that a retail website is safe to shop at, the site should display the padlock symbol in your browser and instead of the site beginning with http, it should read https.
You should also make sure your cards are registered either with Verified by Visa or MasterCard SecureCode. If you have not already done so, you will find that it is easy and quick to do and offers an extra layer of security.
If you hold a Visa card or MasterCard you can sign up to either of those two services at your card issuers website or when you shop online with a merchant who participates in the scheme. The service means that when you shop online using your card, you will be required to enter a password first for your payment to be approved.
Just as important as making sure your cards are safe, it is critical to keep your PC safe. You should make sure your PC has anti-virus software. If there are multiple users of your computer, or you use a computer from an internet café, you should log off after every online shopping session. You should also maintain a note of the confirmation number of your order, even better would be to print a copy of the confirmation.
If you are purchasing presents that cost over $100 you should pay by credit card because it means you have extra protection from the Australian government, in the event the retailer goes bust.
Delivery and returns
There are a couple of things you need to make sure of when it comes to the delivery of your Christmas shopping.
The most important obviously is when the items you have ordered with actually be delivered. It won’t go down well with your kids, if on Christmas day you are making vague promises of presents that did not arrive on time.
The other thing you need to know is whether there is any extra charge for delivery, and you should also take the delivery charge into account when comparing the cost of items. Some sites charge fees for delivery, whilst others offer free delivery.
You should also make sure you understand and are comfortable with the refund policy of the merchant you intend to buy your gifts from.
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9 Tips For Protecting A Credit Card
Most borrowers are acutely aware of the need to protect their credit rating or score through the judicious use of credit. Borrowing what they can afford to pay, and ensuring that repayments are made on time.
Many consumers however fail to realize the importance of protecting the credit card itself. Here are nine tips for ensuring your credit card number does not fall into the wrong hands.
(1) Never hand over your card information over the phone, without first clarifying why you need to do so.
Card holders should always know exactly whom they are talking to and who is asking for the card information before giving out any details. If the call is unsolicited, never give any credit card information out as a rule.
(2) If the website is unsecured, it is unsafe to use a credit card.
Despite the convenience of shopping online, it is not completely 100 per cent safe. Consumers should be careful to check whether the website is secure and that it explicitly says transactions are safe. There is of course very little you can do if the website is not secure but says that it is. The easiest way to deal with that is to stick to making purchases from big reputable companies.
(3) Avoid placing credit card information in conspicuous places, like the back of an envelope or on a postcard.
That is fairly self explanatory advice, but it is surprising the number of people that don’t take basic precautions to protect their credit card information. If credit card information is required from a vendor, then the consumer should ensure that information is placed inside the envelope and the details are not discernable from the outside.
(4) Do not share personal or confidential information on social networking sites.
Social networks such as Facebook or Twitter have proliferated over the last five years and have become extremely popular. Many people like sharing information about themselves, but consumers should be careful about how much information and what kind of information they share, otherwise they become vulnerable to identity theft.
(5) Never Sign Blank Charge Slips
That is a recipe for disaster and leaves the consumer open to abuse. Card holders should always know exactly how much they are being charged for and should always verify the amount with a receipt.
(6) Check Monthly Statements Regularly
Borrowers should always look closely at their monthly statements and verify each charge made. If something is not right, then obviously that can be queried with the card issuer immediately.
(7) Destroy or cut up old cards through the account number.
When a card issuer provides a new card or the borrower closes an account. The card no longer required should be cut through the account number so it can no longer be identified.
(8) Always ensure credit card numbers and PIN are protected when using ATM’s or over the telephone.
One can never be to careful about the people that are around when personal data needs to be handed over. So consumers should ensure to be careful when using their cards over the phone or at the ATM.
(9) Try and minimize the number of credit cards that are carried.
This is basically to mitigate any potential misuse if the consumer loses their wallet. The less cards that are actually carried the less risk of misuse there is, and also ensures that the consumers has other cards available should there be a loss of the primary cards. If there is a loss, it is the consumers’ responsibility to report the loss.
Though most credit card companies and banks offer unauthorized protection, you are ultimately responsible for how your credit card is used. Your credit rating is important, so protect your credit the way you would protect a wallet full of cash.
Four Tips When Looking For Balance Transfer Deals
Balance transfer deals can be confusing at time. Done correctly though, they can really help alleviate the burden of debt for borrowers, and knock of thousands of dollars in interest payments. Here are four tips for the perfect balance transfer.
Tip 1: Look For The Longest Possible Deal
Generally speaking when transferring a credit card balance, the number one priority or the most important thing to look for is the card which offers the longest period interest free.
If an individual is carrying just $5000 in debt, the savings offered by differences in interest free period can be dramatic. A card with an interest free period of sixteen months, saves the borrower as much as $868.27 compared to a card with an interest free period of 5 months (assuming the borrower steadily pays $100 a month).
It therefore makes sense to look for the card or balance transfer deal with the longest interest free period.
Borrowers should be aware that transferring balances, between cards issued by the same lender is not possible.
Step 2: Avoid Paying Steep Fees
Fees are a part of life for people wishing to avail ordinary banking services in this day and age. Fees are fine for people who are not in debt, but start adding up quickly for individuals carrying debt.
When credit balances are transferred, usually the lender charges a fee as a percentage of the total balance transferred, which can be as low as 1 per cent or as high as 5 per cent depending on the card issuer.
It therefore make sense that once the borrower has assessed and obtained the longest possible interest free period, they should then start looking at the fees different lenders charge to undertake a balance transfer.
Step 3: Save Payments
If a borrower intends to pay off the majority of their credit card balance before the interest free period is over, then instead of making regular payments to their credit card balance, they can place the money in an interest bearing savings account, whilst the debt being carried is interest free.
The amount earned in interest may be marginal, especially with interest rates being so low, but an interest free period, is the same as free money (after fees have been deducted) and it makes sense for borrowers to put away their payments in an interest bearing account, and ensure the balance is paid off before the period is up. It is money for nothing.
Step 4: Avoid Negative Payment Hierarchy
We talk about negative payment hierarchy all the time, and when it comes to balance transfers and with good reason. Borrowers who don’t have a fair understanding of what it means could end up with a nasty shock, despite making the best effort to ease the burden of debt that they are under.
Simply put, a credit card will allocate any payments made on its balance towards the debt that costs the borrower the least amount in interest. That is to say, if a borrower engages in a balance transfer, any payment made on the card used to conduct the transfer will be used to pay of the existing debt, whilst any purchase made will continue to accrue high credit card rates of interest.
If a borrower makes a purchase after a balance transfer, they shouldn’t be fooled into believing that if they pay the whole amount of the purchase off, they will continue to pay no interest. The amount paid will simply be used to eliminate some of the balance transfer, whilst the purchase will continue to require interest servicing.
It is easy to fall into the trap, with some cards offering varying interest free periods for purchases and balance transfers. The former can be as long as three months, with purchases requiring interest payments beyond that, whilst the same card can offer balance transfers for as long as eighteen months in some cases.
The easiest way to avoid the problem is to use different credit cards for purchases and balance transfers. That way if a purchase is made, the borrower has a card specifically for the purpose, and can pay down the cost of the purchase whenever they desire.
The other alternative is to opt for cards with positive payment hierarchies. Unfortunately at the moment, there don’t seem to be that many around, but it is a growing trend, and within a few years, there will be a multitude of offers.
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A Rough Guide To Mortgage Payment Holidays
For most individuals, their mortgage payment is the largest monthly expense, and when finances are tight it is tempting to look at mortgage payment holidays as a solution. Mortgage Payment holidays cost a lot more than one would think and one should have a good understanding of the costs involved before using them as solution when things get tough.
What Is A Mortgage Payment Holiday?
A mortgage payment holiday are offered by mortgage lenders giving the borrower breathing room when finances become stretched, when they lose their jobs, have unexpected large expenditures or take maternity leave for example.
The lender allows the borrower to temporarily suspend their mortgage payments.
Conceptually this sounds like a good deal, but there are costs involved and borrowers should make every effort to understand the rules. Also before considering payment holidays as an option, one should check with their mortgage provider. Not all lenders offer the option.
Basic Payment Holiday Guidelines
The way payment holidays and the rules associated with them vary considerably from lender to lender, but here are some general rules.
1. Payment holidays are always a temporary measure, and how long a break provided, depends on the lender. Some lenders provide the flexibility of up to a year, and others allow for no more than six months over the life of the mortgage.
2. There is a minimum payment period before a holiday can be applied for, usually of about a year.
3. Some lenders require borrowers to be consistent and up to date with their payments before granting a payment holiday. Others take a more compassionate view and allow borrowers who have fallen into arrears to apply for a payment holidays, though they may be insistent that the maximum payment missed must not exceed one payment.
4. If the loan to value ratio, the proportion of the property’s value taken as mortgage is high lenders may not grant the borrower a payment holiday.
5. Interest still continues to be payable even whilst a mortgage payment holiday is in place. Missed interest payments are added to the value of the outstanding loan, which means that the total amount owed after the mortgage holiday rises, increasing the monthly payment.
An Example Of The Cost Of A Payment Holiday
Assume the original mortgage is for $150,000 with a term of 25 years and an interest rate of 4.5%. The minimum monthly payment on that would be $833 and after the first year of payments, a total of $9,996, and the total loan outstanding would be $146,677.
At that point if the individual decides to take a three month payment holiday. For the duration of the holiday, capital payments are suspended, whilst interest payments continue to accrue, increasing the amount of capital owed to the lender. For every month a payment is missed the amount owed increases, increasing the interest amount still further.
The amount of interest payable over the three month holiday amounts to $1,656.
After the payment holiday, this additional amount is added to what the individual already owes to the bank taking the balance owed to $148,333 ($146,677 + $1,656).
This has the effect of increasing the monthly payment by $14 increasing the monthly payment from $833 to $847.
An additional $14 a month may not sound to large, but if that amount is paid over the rest of the term of the loan (23 years and 9 months), the total repayment will be $251,391 ($847 x 285 payments plus $9,996 already paid)
If the mortgage payment holiday had not been taken however and $833 had been paid consistently over the entire 25 year term, then the total amount paid would be $249,900.
The three month payment holiday has ended up costing $1,491
(There is an assumption that interest rates stay the same throughout the 25 year term of the loan)
When Is It Appropriate To Take A Payment Holiday?
Clearly payment holidays are expensive. Sometimes however a payment holiday may make sense if the only option beyond a holiday is falling into arrears. If an individual is worried about making their payments, they should speak to their lender immediately.
The lender may decide that a payment holiday is not appropriate and may offer help in other ways, in the form of reduced payments for example. Individuals should look at alternatives such as the possibility of extending the term of the loan, which would reduce the monthly payment or making interest only payments temporarily. Both methods will increase the total amount of interest paid, but may be cheaper than payment holidays.
5 Mortgage Tips
Mortgages or buying a house can often be the most expensive financial undertaking for an individual over their lifetime. It is therefore critical that they are aware of common pitfalls and unforeseen costs when buying a house and obtaining a loan to finance the purchase. Here are six common borrowing traps that can be avoided.
1. Avoid Expensive Arrangement Fees
A lot of banks (not all of them) levy a charge for the cost of arranging mortgages. These charges can run hundreds if not thousands of dollars. Borrowers who manage to obtain low interest mortgages should be careful to find out whether the loan comes with a large arrangement fee which could easily make redundant any savings made from paying a low interest rate.
Arrangement fees that are charged as a percentage of the total loan should in particular be avoided, and the fee for that type of loan can be nothing short of extortionate.
If the lender provides the option and the borrower has the ability, then individuals should try and pay the fee in advance instead of allowing it to be combined with the loan and attracting interest. However borrowers should be extremely careful, and should read the fine print before they pay the fee. Some banks will keep the fee despite rejecting the applicant for a loan, so individuals should make sure what the lenders policy is before paying a fee in advance.
2. Avoid Paying The Higher Lending Charge
Individuals who want to borrow a high proportion of the property value they are financing (known as high loan to value) may end up being required to pay a higher lending charge, which compensates the bank for the increased risk exposure they have.
For example an individual who has the ability to make a 10 per cent down payment and needs finance the other 90 per cent of the purchase has a high loan to value, and such a loan may attract the higher lending charge.
HLC’s are expensive, and a little unfair since high LTV’s tend to incur higher interest rates to begin with, which should more than compensate the lender for the increased risk, without requiring the borrower to pay an additional charge.
The best way to counter such charges is increase the amount of deposit, perhaps defer the purchase until the individual can finance a greater proportion of the loan, themselves.
3. Be Aware Of Extended Early Repayment Charges (ERCs)
A lot of mortgage loans come with an ERC attached targeted at those borrowers who manage to pay off their loan early or decide they want to refinance and move the debt onto another lenders books.
Some banks levy ERC’s even longer than they offer the special rate deals and borrowers should actively seek to avoid these kind of loans. ERC’s which have long periods of validity basically hold the borrower to ransom, allowing the lender to set rates without giving the borrower the ability to refinance without triggering the charge.
Therefore though it can be tempting to overpay ones mortgage, borrowers should be careful by how much they do so lest they trigger an unnecessary charge.
4. Understand The Standard Variable Rate (SVR)
Standard Variable Rates (SVR), is the floating rate of interest that the lender charges once the introductory interest rate ceases to be applicable. SVR mortgages are a good deal when the central bank cuts official interest rates as it has done of late and can save the borrower a good deal of money., But they are double edged swords and when the central bank begins raising rates as they are likely to do shortly, then SVR’s can cause substantial increases in the monthly payment.
5. Do Not Use Mortgage Payment Holidays
Mortgage payment holidays may seem like a good way to bridge the gap for those struggling to meet their financial commitments, but this should be a last case solution for people who are struggling.
Payment holidays are not entirely cracked up to be what their name suggests and the true cost can be extremely expensive.
Though the capital payment is suspended, the interest incurred is added to the mortgage, increasing the amount owed to the lender, which is compounding. For every payment that is skipped, the interest amount increases because the amount owed to the lender has increased during the payment holiday. Therefore payment holidays should be used only when the borrower’s finances are dire, and are not a cost effective means for trying to get expenses under control.
Three Credit Card Pitfalls That Can Be Easily Avoided
Many borrowers make common mistakes when using their credit cards. Here are three pitfalls that can be easily avoided.
Negative payment hierarchy
Balance Transfer cards offer attractive interest rates for borrowers who transfer existing debt from other cards on to the balance transfer card. What they usually fail to tell the borrower is the way the card calculates interest payable is usually based on negative payment hierarchy.
Negative payment hierarchy (NPH) has been explained here many times, but for first time readers, NPH is the order in which repayments on outstanding debt are allocated. Simply put the cheapest debts, or the debt which carries the least interest gets paid off first, whilst the most expensive debt continues to attract high rates of interest.
So if a borrower does opt for a balance transfer with low interest on the transferred debt, they should be careful to avoid making purchases using the same card that they transferred the debt onto, because any payment towards that card will go towards paying off the amount transferred and it is unlikely that new purchases will carry the low rates of interest.
Cash Withdrawal Charges
Without question, cash withdrawal using a credit card is one of the most expensive ways of borrowing. As soon as a borrower withdraws the money they are levied a cash advance fee ranging between 2 to 3 per cent of the amount withdrawn. The borrower is also charged a higher rate of interest on the amount withdrawn than they would, had they purchased something for the same amount using their credit card.
Unlike purchases, there is no interest free period for cash advances, so interest is charged from the moment the amount is withdrawn. Credit card cheques, which often come attached to the bottom of the card statement and are touted as an easy way to pay bills or easy access to cash is no better than withdrawing cash using a credit card and borrowing in this way will cost as much as a regular cash advance.
Minimum Payment Reductions
Borrowers often mistake it as a positive thing when card issuers reduce their minimum monthly repayments, really they are unaware of the consequences of such a move. Reducing the minimum monthly repayment usually means that the borrower is in debt to the card issuer for far longer than they would ordinarily be and ends up paying more interest than is necessary.
For example, if a borrower had a balance on their credit card of $1,000 and paid just 2% of the outstanding balance each month, it would take 400 months (that’s over 33 years!) to pay back the balance (assuming an APR of 18.9%). If the borrower were to simply add an extra $10 to their monthly repayment, they would reduce the time taken to pay the full amount owed to just 77 months (just over six years), and save themselves $2,193.23 in interest.
If a card issuer reduces the minimum monthly payment, the best way to counter would be for a borrower to set up a standing instruction with the bank to pay a fixed amount over and above the minimum, and as described, even small amounts can make large differences.
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When Should Individuals Increase The Amount Of Life Insurance Cover They Have?
Most individuals take out an a life insurance policy only once in their lives, and as time progresses and they go through the various stages of life without purchasing more cover. Here are key stages in an individual’s life where they should be either buying life cover or bulking up what they do have.
(1) Buying A First Home With A Spouse
Taking out a life insurance policy when one gets into large debt such mortgages for buying a house goes without saying, it is the only way an individual can offer protection to their partner from un-repayable debt in the event of death.
(2) When There are Other Debts And Dependants
Personal loans and credit card debts are also liabilities for a partner, so the amount of life cover taken should be enough to ensure that those debts can be paid. Unsecured financing will be collected from the estate of the individual otherwise and this could have negative effects on the individual’s family. It is better for life cover to be large enough to be able to pay of the debt.
(3) When The Individual Gets Married
This is a fairly obvious time in life to obtain life insurance cover, and one should ensure that that the cover is large enough to provide for the contributions the individual makes to the common finances of the partnership, and that the spouse is not saddled with debt in the event of a death.
(4) Starting A Family
At this point, most people will have purchased life insurance cover, it is at this point that individuals should take another look at their policies and work out whether the amount of insurance cover is adequate, now that there are new dependants to the family. A death at this point could be catastrophic if cover is not adequate, so it is probably a good idea to increase the amount of cover.
(5) If An Individual Becomes A Stay At Home Parent
There is a common misnomer if an adult forsakes their career in order to stay at home and raise children that they do not need life insurance cover. This could not be further from the truth, and a parent who stays at home should by a life insurance policy which would cover the cost of childcare and running the household should there be a death.
(6) If An Individual Has More Children
This is a fairly obvious time to increase the amount of cover. The simple rule is the more dependants there are the more cover the individual should obtain
(7) Moving To A Larger House
Larger houses often mean the size of the mortgage increases, and the simple rule again is the more debt that is carried the larger the amount of cover the individual should obtain.
(8) An Increase In Salary
For those individuals who find themselves climbing the corporate ladder at work, an increase in salary can mean many things, a more affluent lifestyle, larger house, private education for the kids. But individuals who find that their incomes have increased should also think about upgrading their life insurance cover.
(9) Relying On Someone Else For Financial Support
If an individual has someone else supporting them financially, then they should think about taking out a life insurance policy to insure that person’s life. In theory it is possible to insure any individual provided the person insuring someone else has an insurable interest, such as being negatively impacted financially in the event of that individual’s death.
But don’t be over-insured
Though changes in circumstance over one’s life can often mean requiring additional cover, these changes do not necessarily mean a person needs to buy more cover. For example if an individual has no dependants, then they do not need to be carrying a life insurance policy.
Policies can easily be cancelled at a later date, and when people have finally paid off their house and their children have left, and it is important that individuals do not pay for cover that they do not need.
The Top Ten Worst Credit Card Mistakes Part 1
When individuals face financial problems it is not surprising that credit card offers suddenly start to look very appealing. Here are the first 5 of 10 commonly made credit card mistakes.
1. Having Too Many Credit Cards
The most obvious mistake that consumers make is having to many credit cards. If consumers were to ask themselves whether a new credit card was needed, 95 per cent of the answers would be no. Having to many credit cards is a temptation that consumers don’t need, a lot of times consumers end up carrying more debt than they can afford largely because they don’t know when to stop spending on credit. Therefore having to many credit card is never a good thing.
Even having cards which carry zero balance is not good. Multiple open accounts could cause lenders to question whether the account holder is in danger of over extending themselves.
2. Misunderstanding introductory rates
The most common mistake borrowers can make is obtaining a balance transfer card under the assumption that transferring interest bearing debt from existing cards on to a zero interest rate balance transfer cards is good money management. It is good management so long as the borrower is acutely aware of when the introductory offer of zero interest rates cease.
A lot of borrowers are simply unaware when the teaser rate is no longer valid, and assume that when they get beyond the offer the interest rate will be reasonable or no different to other cards. That is not always true, and borrowers should always strive to be aware of how long the offer they take advantage of is valid for and what the interest rate on the debt carried beyond the introductory rate is.
3. Not Reading The Fine Print
Borrowers failing to read the fine print when getting into debt on a credit card is mistake number 3 and something that is easily avoidable.
Buried in the fine print is how long introductory interest rates validity is buried, the fine print also contains information and charges relating to balance transfers and specify offer limitations.
4. Choosing A Card For The Wrong Reasons
Many consumers opt for cards based on non material attractions such as rebates or rewards programs. These type of bells and whistles often cause consumers to ignore the fine print and not bother with learning what their fees and interest charges are or how long their introductory rates are valid. This type of behaviour is choosing credit cards for all the wrong reasons
5. Failing to Shop For Rates
Consumers are often too lazy to shop around for the card with the best interest rate, and this is mistake number 5
It’s especially important to note the rate on unsolicited offers. When borrowers struggle financially, they are not likely to be able to get the most favorable rates or terms. So borrowers and consumers should comparison shop for a credit card.
Growing Trend Of Medical Tourism May Be An Alternative To Health Insurance
During the last US Presidential election both democratic candidates, the then Senator and current president, Barack Obama, and his democratic rival Hillary Clinton made health care in America a priority election issue,. Both candidates threw around large numbers number ranging in the tens of millions of numbers of middle class Americans who either lacked health insurance all together or were under insured.
Rapidly escalating health care costs have caused the uninsured and the companies that do offer health insurance for their employees to start considering options for treatment, which go beyond the scope of domestic borders, and are increasingly geared towards lower cost solutions in developing world countries such as India.
In fact some of the best hospitals in India are now competitive with or even exceed their rivals in the developed world in terms of safety and quality. One estimate, according to the Economist Newspaper suggests that Americans can save up to 85 per cent by looking at lower cost alternatives overseas, and that the number of ‘medical tourists’ would increase from under 1 million in 2007 to 10 million by 2012
McKinsey, a consultancy, has estimated that “medical tourism” could bring India an additional 50 billion-100 billion rupees ($1.1 billion-2.2 billion) in annual revenue by 2012, and the healthcare industry as a whole in The US could be deprived by as much as $160 billion in annual business by the global medical outsourcing business.
The coming boom is not viewed as boon universally however, critics suggest that a deluge of foreigners into emerging market healthcare systems will cause money and expertise to flow away from domestic state owned healthcare systems. Doctors currently employed by the state will move to the private sector which means that resources normally devoted to ordinary people will be lost. Others suggest that medical tourism is nothing more than a band aid which removes attention from the true nature of the problem in the developed world, the need to cuts costs and improve quality.
‘Medical tourism’ itself has been around since the dawn of civilization, the ancient Egyptians used to travel remote retreats for treatments for centuries and that practice has turned into what we know today as being ‘medical tourism’.
A report by professional services firm Deloitte reckons that approximately 150,000 Americans sought treatment overseas in 2006, with the majority doing so in Latin America and Asia. The number of Americans seeking treatment overseas in the following year increased fivefold and grew to an estimate 750,000 in 2007, and the report suggests that the number could reach as high as 6 million as soon as 2010.
The shift towards seeking lower cost alternatives with high quality health care providers in emerging markets such as India is hardly surprising given the economic downturn. In fact according to the Deloitte survey , 40 per cent of Americans are willing to travel if they can save 50 per cent or more on their health care expenditure.
Britain and Canada, both of whom operate nationalized health care systems have as a result suffered from overloaded healthcare systems, which have resulted in long waiting lists. In some cases patients who require an elective procedure need to wait between six to twelve months in the UK and Canada, which can cause the patient severe pain and other symptoms.
According to Prathap Reddy, cardiologist and founder of Indian hospital chain Apollo Hospitals, if a patient has to wait six months for a heart bypass, they may no longer need it anymore.
In 2003 according to the Economist, 50,000 UK citizens sought treatment overseas, and the trend seems to be following that of the US, with the Newspaper suggesting that by the end of this decade 200,000 will do so, creating a market worth a £886 million market.
India as a medical tourism destination is dwarfed by its much smaller rival Thailand, but it looks well equipped to compete for the business of providing health care to patients from OECD countries. There are on a macro level an extremely large number of highly qualified doctors, and a large number of Indian diasporas who may combine seeking treatment with visiting family. There are nearly 1.5 million people of Indian origin in Britain alone.
Harry Srivastava from the Confederation of Indian Industry says India has competency and is cost effective at every level of healthcare, from new drug discovery and testing to surgery, and the obvious solution for patients in the developed world is to outsource their medical requirements. Patients can save anywhere from between 50 to 75 per cent of the cost of treatment. A surgery which costs US$60,00 in the US could cost as little as US$6,000 in India.
Apollo Hospitals Dr. Reddy believes the big opportunity lies in what he calls “disease management “ Joint replacements, heart bypass and cataracts. Dr. Reddy also sees opportunities in elective treatments such as in-vitro fertilization and cosmetic surgery. India already posses a vibrant health tourism industry offering alternate medicine such as Ayurveda, yoga and massage.
Whatever the benefits, politically speaking it is hard for HMO’s or the NHS to be seen to be sending their patients to a third world country for treatment, and India as a destination still has an image problem compared to rivals such as Thailand despite launching an advertising campaign.
The poverty in India at times makes even its resident squeamish sometimes about the notion that foreigners can come to the country and obtain the best facilities whilst its own citizens lack even basic healthcare. Despite the macro numbers, India has only 51 doctors per 100,000 people, which compares with 279 per 100,000 in America.
Whatever the view, as an industry medical tourism, like its better known cousin software exports, will bring new money into the country, and finance a shift in allocation of resources which would only be beneficial to India’s poor. Though in the short run it has its issues some of which may be unpleasant, overwhelmingly in the long run, it will most certainly provide large benefits to patients, both the poor in India and the rich from overseas, and the trend is more the likely going to continue and grow.