Types of debt
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Good debt helps you get ahead
'Good' debt can be taking out a loan for something that will rise in value over time. Things like a home, building a business or furthering your education. -
Bad debt often costs you more over time
'Bad' debt can be debt you've taken on to buy items that lose their value quickly, or debt that doesn't really help you work towards your goals. It often has high interest rates. If you're using credit cards or pay-day loans to make a purchase, the overall costs can increase if you’re not repaying it quickly.
Understand your debt
The best place to start is at the beginning. A few small steps to understand your debt will help set you up to make a plan.
- Make a list of all of your debts
Include the interest rate you're charged, how much you currently owe and what the minimum repayment is. - Check your repayments with your budget
Are the current minimum repayments within your budget? Can you shift budget around to meet the minimums and avoid paying late fees?
Don’t struggle in silence. If you’re finding it hard to keep up with your debt, need help building a repayment strategy, or want to check if you have the most appropriate lending products, contact us. We're here to help.
Paying the minimum is important
If you don't think you can, reach out to the ASB Financial Assistance team today.
Pay more than the minimum, whenever you can
This helps you save money on interest and you repay the debt faster.
Pick your repayment strategy
There are different strategies for paying off debt, so choose the one that works best for you. Regardless of your approach, make the minimum repayment on each debt and more if you can. Once you've paid off a loan, shift that repayment into the next one. Here are some options to consider:
Smallest debt first
Get a win by crossing a whole debt off your list. Pay the minimums on all debt, and more on the smallest.
Highest rate first
Reduce the total amount of interest you'll pay. Pay the minimums on all debt, and more on the one with the highest interest rate.
Debt consolidation
Combine all of your debts into one, so you only have one payment to manage*.
Understand debt consolidation
Automate your repayments
Once you know what repayments you need to make, the next step is to get them automated. By setting up your repayments to go out automatically, you can align the payments to your pay day, and remove the stress of remembering who you need to pay, and when.
You can set up an automatic payment in the ASB Mobile Banking app or with FastNet Classic internet banking. You'll need:
- Their account name and bank account number
- Reference details to appear on their statement
- How much to pay (the amount), and how often (the frequency)
Avoid new debt
If you're starting to feel overwhelmed or like your debt is unmanageable, it's a good idea to avoid taking on more debt. A few small steps can help you feel more in control, and we’re here to help:
Lower your credit limits
Check your overdraft and credit card limits and lower them if they're higher than what you need.
Set transaction limits
Set spending limits for each transaction on your ASB Visa Debit and credit card to keep your spending in check.
Block online spending
Turn off online purchases on your ASB Visa Debit and credit cards to help stop you spending money online that you may regret later.
Other actions to build better financial wellbeing
Master your day to day
Organise your money and set a plan.
Prepare for the unexpected
Build a safety net for unexpected costs and losses.
Work towards your savings goals
Get saving savvy and grow your money.
Invest in your future
Build towards your retirement.
Read more about getting on top of debt
*ASB’s lending criteria and terms apply. Minimum loan amount $2,000.