Money Traps

While money is very important in our lives, it is vital to be aware of the potential money traps.

Money Maze

Other common bank charges include the charge of a service fee for making a withdrawal from a competitors ATM, or charges for cheques.

Credit Cards
For teenagers or adults on tight budgets, credit cards can be quite dangerous. While a credit card enables you to purchase what you want at the time, if the card is not paid off in full by the determined date, then you will pay a high level of interest on the remaining balance. The level of interest can be up around 17 or 18% in some cases and if you are unable to make repayments, you end up paying interest on the interest.

See Credit Card Tips for more information on how to avoid falling into a credit card trap.

Store Cards
Many department stores now offer you the opportunity to purchase items with their own personalised store card. Ensure you look closely at the interest free period, repayment requirements and interest payable on default before signing up for these cards. Remember that these stores offer these cards as part of their business and to create customer loyalty. Either way, their goal is to make money from your purchases.

Interest-Free Periods
Many of the larger stores offer interest-free periods on high-priced items. While this is a great way to purchase expensive furniture, whitegoods or electrical items, you also have to pay for them somewhere down the track. Ensure you are aware of all the conditions of an interest-free period. Often, the entire loan must be paid off before the end of the interest-free period. If this is the case and the entire amount is not paid off you be liable for interest on the remaining balance, dated back to the day of purchase – an expensive mistake. Often stores will advertise no repayments for 12 months or similar. Read the fine print because in many situations, if you have made no payment by 12 months and one day, you may be liable for interest back-dated to the date of purchase.

Betting or Gambling
The lure of making quick easy money by betting on sporting events, going to the casino or playing on the pokies has played havoc with many lives. While we hear very few success stories, for a majority of gamblers, the outcomes are not good. If you have a problem with betting or gambling, and particularly if you are losing money that you cannot afford to lose, seek professional help immediately.

Owing Money
There are times when we borrow money from family, friends or organisations, to purchase a product or service that we really need at that time, but do not have the financial resources to make the payment ourselves. Always ensure that you have the means to make the repayment in a timely manner. Borrowing money from friends and family and then not repaying them in a timely or agreed manner can cause huge rifts in relationships.

Money and Internet Scams
Together with the growth of the internet comes the growth of money scams. There are thousands of emails that are distributed everyday that have the core purpose getting money from innocent people. These illegitimate activities are called scams and in many cases constitute fraud. Do not give your financial details to anyone over the internet if the request has come from an unsolicited email. If you do need to provide your financials to purchase a product or service ensure the website is secure. You can check this by looking at the website address and it should begin with https.