Check what debt costs

Borrowing usually costs more than you think.

Interest is what a lender charges you for borrowing. A credit card and a home loan can work very differently, so look at the rate and the fine print.

Credit card balance: If you carry a credit card balance, the interest can add up quickly. Check the rate and when it applies.

Car loan: For a car loan, look at the rate, fees and how long you’ll be making repayments.

Main point: When comparing debts, look at the rate, fees and how long you’ll be paying it off.

Debt interest keeps ticking along.

Your investments might make money, or they might lose money. A loan can still charge interest either way.

Compare a real cost with an uncertain return.: That’s why expensive debt often deserves attention before taking bigger investment risks. Just remember to consider your emergency savings and the terms of the loan too.

Put the interest rate into dollars.

Here’s an example with A$2,000 owing for a full year, with the balance kept unchanged. Move the rate to see the rough cost, before fees.

Real loans calculate interest more frequently, and repayments change the balance. Use this to understand the size of the cost, not as a loan quote.

Start by finding two numbers.

You can’t really compare debt options until you know what they cost and when payments are due.

Find the interest rate: Open the loan or card statement and find the annual interest rate.

Check payment dates: Check your next due date and minimum repayment.

Main point: At a minimum, know your interest rate and when the next payment is due.