Who's counting?

Well it was probably you - adding up debt looking at interest rates, petrol costs and trying to figure out a way to cope in 2008. As always I have a few ideas...or rules:

First Step
Talk to whoever will offer you the lowest rate for debt consolidation for most of us that is the bank, PSIS or credit union. Try and avoid those credit brokers who claim to search the market for "the best deal."

Be aware however that if a loan period is extended it will extend the amount of interest you pay. Here is an example - if you are paying back $10,000 at $236 a fortnight over two years (at an interest rate of 20.9%, a common credit card rate) you will pay $2243 in interest. Stretch that out to four years at 23% cuts fortnightly payments to $147.47 but the total interest paid is $5186 - result = deeper debt.

Get Advice
Three excellent websites are that of Consumer, Sorted and the Federation of Family Budgeting Services (www.familybudgeting.org.nz) and you can get free confidential advice from this excellent organisation.

Change your Mindset
As I frequently say money does not solve money problems. I suggest you grab a copy of Money, Money, Money Ain't it Funny which is all about how your mindset controls your finances and how to subvert your impulses (well those relating to money - I would not dare to proffer advice on any others!)

Plastic Fantastic
Convert to a low interest credit card like Bank Direct at 11.95% but don't pay the minimum payment of 5% - you'll still have that albatross around your neck in a decade.

Mortgage Top Up
Using your home equity can be a good idea given the low interest rate - low in comparison to that of cards - but best to set up a separate mortgage account to pay the debt back quickly. Property values are consolidating and you are unlikely to find rebuilding your equity a quick process.

It All Adds Up (Courtesy of Rob Stock from the Sunday Star Times)
The debt-consolidation Google
Ordinary Links:
1. NZ Loan (Finance company)
2. PSIS (co-operative banking organisation)
3. Future Finance (credit broker)
4. Instant Personal Loans (finance company)
5. Consumer (consumer advocate)
6. Credit Express (credit broker)
7. Finance Point (credit broker)
8. Problem Mortgages (mortgage broker)
9. Sorted (consumer advocate/information)
10. Payplan (credit broker)

Sponsored Links:
1. American Express
2. National Bank
3. Asset Finance (finance company)
4. GE Money (finance company)
5. Credit Express (credit broker)
6. NZ Loan (finance company)
7. The Specialist Lender (mortgage broker)
8. East Bay Finance (credit broker)
9. Active Finance (credit broker)
10. Wizard (mortgage lender)
*irrelevant links screened out