Offset
Many premium home loans have an offset account. Its primary function is to offset the interest rates of the home loan involved.
To make the most of an offset account, you should have your salary deposited directly into your offset account. Doing it this way, you won’t have to think about transferring your funds from your payroll account to your offset account and you won’t have to worry about your monthly repayment as well.
If you’re free from credit card debt, you can put your monthly expenses on plastic. Paying expenses this way prolongs the stay of the balance in your offset account and increases your interest savings.
For example, if your monthly expenses are at $2,400, a 9.4% account interest in your offset account can bring a savings total of $15.66. It doesn’t sound much but it adds up every month. If you constantly using your credit card, you may even acquire additional funds or rewards like food voucher discounts and air fare discounts.
As long as there is money in your offset account, you must only use cash as a last option. Let your account balance pay for your credit card bill if it is of greater value. Also keep in mind that you can gain more reward points or savings if you use money once in a while.
And to avoid problems in dealing with your offset account, you must pay your monthly credit card repayments on time. If not, you might have a hard time in budgeting your finances for credit card interest rates tend to be higher than offset account interest rates. You will not be able to fully enjoy your offset account in this case for the remaining credit card interest rate can take up some of your funds.
