Get smart on credit card debt

credit-card-stackHow to tackle credit card debt

So who would you guess has the most credit card debt in Australia? People who earn less than $35,000 or those who earn more than $70,000 per year?

You may be surprised to know that it is people who earn more than $70,000 per year, those who are managers and degree qualified who are most likely to carry $5,000 or more in credit card debt, compared to the general population.

If these people make only the minimum repayment on a $5,000 credit card debt, it will take them 30 years to pay off the debt. That's the length of your average home loan!

Read our media release to find out more about the research behind these facts.

Whatever you owe on your credit card you need a plan to pay it off. If you don't you'll be paying thousands of dollars in interest. The interest rate on credit cards is often higher than it is on other types of credit like loans.

Before you even start sorting out your credit card debt you should look at doing a budget to see how much money you can spare each month to put towards your credit card debts. Use our budget planner.

Budget planner

Top tips to tackle credit card debt

  1. Check if your extra repayments will do the trick - After you do a budget take the figure you think you can spare to pay off your credit cards and put it into our credit card calculator. Then you'll see how much quicker you'll pay off your card and how much money you'll save. Remember, even a small amount more will make a difference.
  2. Follow through and deliver - Closely check your credit card statement every time it comes in and commit this money to it. You might need to set up a direct debit to make this happen. Following through with the promise you have made to yourself to pay off your card is critical.
  3. Get a better deal - If you are paying high interest on your credit card you should shop around for a better deal or consider a balance transfer. Just make sure that the interest you'll be paying after the honeymoon period is not higher than the interest you are currently paying or you might be back to square one. Find out more about honeymoon rates and balance transfers.
  4. Build your wealth with your savings - Work out how you will use the money saved in credit card interest to invest in building your wealth this year. Find out how to increase your net worth.

For more tips on credit card debt find out how to pay off multiple credit cards or check out our credit card debt clock.

Like any kind of debt, you need discipline and a plan to get credit card debt under control.

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Last updated: 05 Dec 2016