Does Your Bank Account Need Need To Go To Rehab?
Istill remember my first symptom of Debt – acute happiness induced by a shiny black credit card. But after four years of swiping that damn thing, Debt came over me like a rash and it was not pretty. If you too are living off canned tuna right now, but miraculously still have a fresh head of foils, chances are you’ve reached a low point and need a financial health check-up, stat. I once worked out how to increase my credit limit 20 minutes before a Zimmermann sample sale, but it wasn’t as easy figuring out how to get the crippling outstanding balance out of my life. So I bit the bullet and called my bank’s general enquiry line ….
I told them about my large credit card debt, the laptop I’m paying off on a “payment plan” (which is actually just another credit card), and the holiday I want to go on in four months … oh, and the fact that I’m on an entry level wage so will not be paying anyone a dime for financial advice. Luckily they had all the answers. Apparently I needed a financial health check-up, which is a free service provided by the bank (visit your bank’s website or call their enquiry line to see if they offer something similar). All I had to do was visit a branch and talk to one of the personal bankers.
Doctor Debt Will See You Now
My check-up started out like an earnest first date. What were my goals? My concerns? What was my lifestyle like? But unlike a first date, the personal banker already knew everything about me. He could see I hadn’t updated my accounts since 2007, which meant I could’ve been earning more interest on my savings for years. Awesome. He also knew I was forking out for a lot of late payment fees and all this could be solved by setting up direct debits and switching to e-statements. No-brainer. Then he told me once we broke down my debt, we could look at the best ways to make my money grow and fulfil some goals. Hallelujah! We dot-pointed, brainstormed, and discussed every
debt consolidation option possible, and he outlined exactly what all my new accounts could do in comparison to my old ones. My financial health prognosis looked like this:
The Cure Fixed Deposit
This account earns 3.05 per cent interest within the first four months. It allows me to keep track of exactly how much money I’m putting towards a holiday and because the interest rate is moderately high, it’s ideal for a shortterm saving goal.
A Credit Transfer
After considering a personal loan, I chose to cancel both my credit cards and transfer their balances to a new credit card with an eight per cent per annum interest rate, through another bank. The low interest rate only applies if I pay off the debt within 12 months. If you are only moderately in debt and committed to getting rid of it, this is a fast debt consolidation option.
Payments for my new credit card, phone bill, rent, and holiday savings account are now scheduled to be deducted on pay day. Not seeing the money come in is the easiest way to fight temptation and forget it exists.
In Four Months’ Time I Will Have
RM4758.63 in my holiday savings account.
Paid off more than RM5100 of my debt (I now deposit RM330 to my credit card account weekly).
Saved over RM900 in late payment fees (just by setting up direct debits).
Being granted a financial clean bill of health is amazing. In fact, I was on such a financial high afterwards, I trawled my bank’s website for an hour. Usually I would have a headache from the mere thought of doing this, but the personal banker showed me how to use the online savings calculator, which is as addictive as Tetris! Clearly I was turning over a new leaf. Like all important check-ups, looking at your true financial state is awkward and a tiny bit scary, but it’s a small price to pay for peace of mind.