5 Steps to slashing credit card debt

January 14, 2015
Peter Dall

For full article go to: Heraldsun.com.au 12th Jan 2015 Money Saver HQ by Sophie Elsworth

Do you have a post-holiday credit card hangover? 

Ouch! I do not know anyone who didn’t blow their credit card budget over the festive season!

The Reserve Bank figures show that, even before the Christmas shopping spree, Australians had more than $33 billion of credit card debt that was accruing interest.

 So, if you are juggling your credit card debt, you will be pleased to know that, by implementing a simple 5 step plan, you can wipe out your debt in a matter of months.

  1. Credit card rates average out to be around 17.49%, with some up to 23.5%. You should be paying off your card in full each month but if you can’t, then it may be time to say goodbye to plastic debt and rip up that card.
  2. Check your latest credit card statement to determine how much debt you have on it.  Then work out how much you can afford to pay off each month and set up direct debits that automatically go onto your card debt. 
  3. If you are only paying off the minimum amount of the debt on your card, you are forking out a fortune in interest charges and barely nibbling away at the actual debt.  Go to the MoneySmart.gov.au calculator for some interesting figures – this should motivate you to make the largest payment off your credit card that you can afford each month.
  4. Consider a balance-transfer card, to avoid paying interest on your card for a specified period of time, often set at around 18 months. But it is not without costs so read the fine print.
  5. By using a debit card, you can only make purchases with money you already have – some retailers even offer discounts for goods when you pay by debit card.

 

So get started now - tackle that debt today and plan to get things back in the black for 2015.

 

 

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