New Mt Barker branch

The Police Credit Union is pleased to announce that its newest branch will open in Mt Barker in late March.

The opening of this branch will extend the credit union’s network to seven branches throughout South Australia and the Northern Territory. The Mt Barker branch will be situated in the Mt Barker Central Shopping Centre, Hutchinson Street, adjacent to the K-mart store.

Once the branch opens, members will be able to deposit cash and cheques over the counter, withdraw money from a dedicated PCU ATM, open new memberships, obtain account balances, apply for loans, and much more.

Police Credit Union is also opening a new branch in Alice Springs. Located in the Alice Plaza (in Todd Mall), the branch will replace the previous agency operated there.

If you have any questions about our new branches, please call PCU on 131 844.

Buy now, pay later

An abundance of interest-free deals means it’s getting easier and easier to go into a department store and walk out with a new lounge suite, a new TV or a new fridge, without handing over a single dollar. But are these loans your best option?

“No deposit”. “Interest-free for six months!” “Spend $500 and pay no interest for 24 months”. Retailers frequently advertise these types of offers, usually for relatively big-ticket items such as furniture or a new car. They are well worth considering, but only if you are prepared to go into the deal with your eyes open. Make sure you read the fine print and do your sums.

The terms and conditions vary considerably from retailer to retailer, and even from time to time in the same store. Sometimes a deposit is required, sometimes not. Typically, the interest-free period can be anything from three months to two years. It can be worth watching and waiting a while before rushing in to buy.

The best deals, and the easiest to assess, are those in which you have to pay off the whole loan by the end of the interest-free period. One advantage in this case is that you know exactly what the deal will cost you each month, even if interest rates start rising.

However, if you are buying a large item such as a new car, there may be a limit on the amount that is interest-free. For example, if the car costs $16,000, the “interest-free-for-two-years” deal may only apply up to a maximum amount of $9,000. And the finance company may also have a minimum amount it will lend, which may be $10,000 or $12,000. So what you really have is an interest subsidy, rather than a completely interest-free deal.

Make sure you are brutally honest with yourself. How much uncommitted spare money do you really have each week? Are you going for the interest-free deal because you are already up to the limit on your credit card? The closer you are sailing to the wind, the riskier it is to take on debt – even “free” debt – where the penalties for default can be very expensive.

Before you sign on the dotted line...

Here’s a quick checklist of points you should consider:

• Is the information you have been given clear? If you are not sure that you understand what it means, ask for an explanation. Better to risk looking silly than be silly enough to just hope for the best.
• Is there an initial fee to set up the account?
• Do you have to pay a deposit?
• When is the first repayment due? If you have to pay a deposit and the first regular repayment is less than a month later, you could be stretching your budget for that first period.
• Is there a monthly service fee?
• What is the minimum monthly or weekly repayment required for paying off the loan? Remember, if there are other charges, you need to work out the total cost per week or per month, and not be seduced by just dividing the price of the item by the number of instalments.
• Can you really afford to pay this minimum?
• What will happen if you are late paying an instalment?
• Is the loan repayable in equal instalments, or are the first or last payments larger than the others are?
• Do you have to pay the full cost within the interest-free period? This is quite a common requirement and, for larger items, it can make the minimum payments quite steep.
• If the interest-free component applies to only part of the total cost, what is the rate of interest on the balance?
• If you decide to pay your loan off ahead of time, is there a termination fee?
• Do you need credit insurance, which will pay off the loan for you if you have a financial disaster?
• Is there a better way of financing the purchase?