Welcome to the future of your money.
Well, we may be getting a bit ahead of ourselves. It’s not quite the future yet, but there’s some important things happening in Australia that will change the way we manage our money.
One changes how we can afford to get credit cards, the next is how our repayment history is used and the other transforms the use of data in the world of money.
Each shifts the balance away from the way things used to be done.
This means a different perspective and, our crystal ball says, a different way of doing things.
The first happened on Jan 1
In a big move from ASIC, credit card providers now need to assess eligibility based on being able to service the full card limit (eg $10,000) in three years rather than just the Minimum Monthly Payment (MMP).
Here is it in numbers (this is a guideline and would be differ based on lender and your individual circumstances).
If you have $500 in disposable income and right now (Nov 2018) you could qualify for a $20,000 card (based on a 2.5% MMP), from January 1 2019 you the most you could qualify for a $13,000 card (based on a 3.8% MMP).
Here’s our full rundown: https://news.moneyplace.com.au/2018/11/27/why-its-about-to-get-harder-to-get-a-credit-card/
The second is about Comprehensive Credit Reporting
CCR has been a slow burn. From September in 2018, more banks and credit unions started reporting, joining forward thinking lenders like MoneyPlace in reporting CCR data.
That means if you pay on time, or pay late it will be reflected on your credit score – a number which could affect your ability to get credit in the future.
So what does that mean for you?
Through 2019 CCR will begin to include mortgages. Aussies will see how data can be used to improve their access to credit. This includes things like MoneyPlace’s personalised interest rates, which take into account every individual situation.
From July 1, an Open Banking pilot kicks off
So what does it mean for you? Essentially it will mean Aussies can take greater control over the data that businesses hold.
For example, we will be able to take our banking data and potentially use it to get a better deal at our bank or elsewhere.
While the legislation is still under review, we can be sure it will mean big things for how we access credit and manage our finances.