Is it worth the trouble? Looking at the ATO fee table there is a 0.70% for Mastercard Credit and 0.78% for Visa Credit.
Are there any card offers ATM which include ATO payments as their included spend to get the bonus offer points?
About to Pay a 40k Hecs Debt, How to Maximise Points Gain?
Zabuza on 09/01/2019 - 16:53
Last edited 09/01/2019 - 17:05 by 1 other user
Last edited 09/01/2019 - 17:05 by 1 other user
Comments
Is there a payout discount? I have had hecs debt for some time now. My indexation on the hecs last year was 900$. 2.8% of 40kish is 1100. So I would only make 200$ a year extra.
No, they removed the discount which was 5% off on $500+ payments.
The discount was scrapped a few years ago. Like Phunkydude said, you're better off getting a better return on that cash and paying the minimum you can for HECS.
Would the hecs debt affect my borrowing capacity for a house?, would be the main reason I want to pay it off atm
@Zabuza: Yes potentially, the bank asked me if I had a HECS/HELP Debit during the borrowing process.
It will also affect your after tax income and therefore borrowing capacity.
@Zabuza: you won't want to borrow to your Max anyway
40k is a good chunk of deposit / interest savings especially rates will only go up from here
*HELP Debt.
https://www.ato.gov.au/Individuals/Study-and-training-suppor…
Best time to make a voluntary repayment
If you plan to pay off your total loan balance with a voluntary repayment, it's best to make your repayment before you lodge your tax return or worldwide income.If you lodge your tax return or worldwide income before your voluntary repayment is credited to your account, a compulsory repayment or overseas levy may be included on your notice of assessment. You may also benefit if you make a voluntary repayment before indexation is applied on 1 June.
Leave it in your savings account until the week before 1 June!!!
Much better to have $40k cash when buying a house than no HECS debt!
HECS debt will be growing each year with inflation - if you don't have any other debts with higher interest, then put into a dedicated savings account and use to pay off the minimum as it's due
Also check the exclusions on your credit cards - I know ATO payments (such as for tax) do not earn points on some cards so you may find the same issue.
Check out: https://www.pointhacks.com.au/ato-points-earning-cards/
I believe most (if not all?) amex cards allow you to use ATO payments to meet the sign up bonus spend criteria
Depends on your finances, if you have lots of money then might as well, its better to have no debt then any debt. But typically its not worth it, HECS is at 1.5% but putting it in the bank returns 2.5% or more, you're essentially throwing away money. You're best at making the minimum repayments.
Then keeping the rest of the money towards whatever (house, savings, not having to borrow as much etc).
They used to do a voluntary payment discount which made it more worth paying back into, but they got rid of it in the hopes to get more money but instead people just don't make any repayments (besides minimum) or people don't work enough to make the minimum.
Agree with the theme here of not paying off your help debt. The reason you are asked when you apply for loans is so they can workout your income, especially if they are asking you for your gross income.
If you have $40k available to pay off your help debt I would strongly suggest you grab a copy of Barefoot investor, it has some easy to follow, practical advice to set you up for life.
no payout discount ?
put the 40k on ING 2.8% or home loan