What is discretionary spending?

Money spent on non-essential goods and services, such as holidays or luxury items. This spending is at your discretion.


What is a basic bank account?

Simple transaction accounts include features such as no account-keeping fees, no overdrawn fees and no minimum deposit amounts. The Australian Bankers’ Association’s Affordable Banking website lists basic bank accounts in a table format so consumers can compare products on offer from different financial institutions and choose one that best suits their needs.


What is bill smoothing?

Bill smoothing may be offered by utility (water, gas, electricity) companies so consumers know how much they will pay every fortnight or month instead of paying their accounts at the end of a normal billing cycle. Billing cycles may vary according to seasons, which can make budgeting difficult. However, bill smoothing may be based on an average bill from ‘similar customers’ or a consumer’s last year of usage. A customer who reduces usage may pay more until their usage is reviewed. Talk to your energy or water provider about bill smoothing and other payment options.


Where do I go to compare energy offers?

Electricity and gas suppliers offer a lot of competing deals – consumers may receive calls from different providers asking them to switch their accounts. It can be difficult to know which offer best suits a consumer’s needs. One way of finding out if you can get a better deal is by visiting the Energy Made Easy website, which is a Federal Government service.


What is the No Interest Loans Scheme?

Visit the No Interest Loan Scheme (NILS) website for more information on the community-based program, which offers individuals and families on a low income access to safe, fair and affordable credit. No credit checks are made and loans are available for essential household items, some medical or dental procedures and educational expenses.


What is a term deposit?

A term deposit is different to an everyday bank, credit union or building society account. Your money is invested for a fixed period of time at a fixed rate of interest. Find out more information about term deposits at the CANSTAR or Money Smart websites.


Where should consumers go for financial advice?

There are different kinds of financial advice. Consumers may want general advice, or more personal service depending on their goals. The Money Smart website has useful information. Consumers should always check how much they will be charged for consultations and plans before they engage a financial adviser. The Financial Planning Association of Australia and Association of Financial Advisers are industry associations that can help you get started.


Where can consumers get information and stay updated on scams?

Whether it’s a phone call out of the blue, an unsolicited email or knock on the door, there are many different scams and bogus schemes run by unscrupulous people with one aim in mind – to rip off consumers. Stay informed and learn what to look out for by visiting the Australian Consumer and Competition Commission’s Scamwatch website.


What is the difference between a debit and a credit card?

When consumers use a debit card to pay for goods or services in person or online, the money is automatically taken out of their bank, credit union or building society account. That means they must have enough money in their account to pay at the point of purchase. A credit card allows consumers to buy things immediately and pay for them later. A credit card will come with a pre-arranged limit. The cost of a purchase will be added to the account and a statement issued regularly (usually monthly). Credit cards usually nominate a set date for a consumer to pay off the account in full and incur no interest, or at least make a minimum payment and spreading repayments over time. If a consumer doesn’t clear the balance during the interest-free period, they will be charged interest, so the quicker the balance is paid, the less interest will be charged. Find out more about credit and debit cards on the Money Smart website.


What is an unsecured loan or debt?

An unsecured loan is issued without the guarantee of collateral (such as property). It is a higher risk for lenders, so they will look closely at credit ratings to support their decision. Unsecured loans may attract higher interest rates than secured loans, but they may be cheaper than those of credit cards.


What is a secured loan?

A secured loan means the borrower pledges collateral (such as property like a car or house) to the lender. If a consumer defaults on a secure loan, the lender may seize the collateral and sell it to recover all or some of the money loaned.


What is a payday or small loan?

A payday or other small loan is a credit facility where borrowers can obtain a small amount of money for a period of weeks, rather than months. The charges and interest rates on payday and other small loans can be very costly. The Australian Government has put controls around this market. Short-term loans under $2,000 due within 15 days are now banned. Read more about payday and other small loans here.


What is a debt consolidation loan?

Debt consolidation is the term for a credit facility that allows a consumer to roll several debts into one loan. It is a good idea for consumers to examine all of their options before they take on more responsibilities or refinancing. For example, consolidating debt may wrap unsecured loans (such as a personal loan, or credit card balance) into a loan secured against assets such as the family home, or a car. For more information, talk to your lender, a financial counsellor or read more online at the Money Smart website.


Where can I find information on contracts and other consumer issues?

The Federal, State and Territory governments each have agencies protecting consumers’ rights and setting out their legal obligations:

Australian Consumer and Competition Commission: www.accc.gov.au

Australian Securities and Investments Commission: www.asic.gov.au

Northern Territory
South Australia
Western Australia

Where can I get help with tax matters?

Visit the Australian Taxation Office website at www.ato.gov.au. You may be eligible for free assistance with completing your tax return under the Tax Help program.


Where can I find a financial counsellor?

Visit the Financial Counselling Australia website or call 1800 007 007 between 9.30 am and 4.30 pm, Monday to Friday.


How can I see my credit report?

You can get a free copy of your credit report by contacting one of the following organisations:

  • Veda Advantage Information Services and Solutions Limited
    PO Box 964
    North Sydney NSW 2059
    Phone 1300 850 211
    Website: www.mycreditfile.com.au


  • Dun and Bradstreet (Australia) Pty Ltd
    Level 24, 201 Elizabeth Street, Sydney NSW 2000
    Phone 13 23 33 or +61 39828 3333 for international callers.
    Website: www.checkyourcredit.com.au



Mistakes do happen. If consumers think a listing is wrong, they should contact the creditor which listed the default in the first instance for a timely and efficient response. Consumers can also contact the credit reporting bodies to have incorrect listing corrected. Consumers can also ask the relevant industry ombudsman to investigate if not satisfied with the creditor or credit reporting bodies’ response. Ombudsman’s services are free. ACM Group Ltd is a member of Credit and Investments Ombudsman (CIO). Other financial institution may be a member of Financial Ombudsman Services (FOS).


Disclaimer: ACM Group believes that informed consumers are the best consumers. The information contained on this website is general advice aimed at improving financial literacy and breaking the cycle of debt. It is not intended to imply any recommendation or opinion about a financial product.