How to Tackle Your Credit Card Debt

If you’re like millions of other Australians, you might have been tempted by a credit card offer with sweet airport lounge access or a low “introductory” rate. It may have come at just the right time and helped you splurge on a holiday or save a little bit on your purchase. 

Fast forward to today: the introductory rate has disappeared and you may have a sizable balance on each of those cards. Oopsies.

Here are a few steps that could help tackle pesky credit card debt.

This is pretty straightforward, but it’s also easier said than done. Stop using your credit cards as soon as you can, because it will be that much easier to achieve your ultimate debt-free goal if you do. Plus, cutting up your credit cards feels pretty darn cathartic. Just saying.

A lot of people fall into the trap of spending more than they earn by using various credit cards. Things get even murkier when you're sharing a credit card. If you’ve never created a budget, you can search online for free tools that can help you.

Then, factor in less common costs that may pop up from time to time. These could include weekend getaways or amounts set aside for shopping or nights out. You still gotta live your life after all!

Once you know how much debt you need to pay off, you can try out a debt repayment strategy. The primary goal is to pay it off as quickly and painlessly as possible, and there are a number of different ways to do that. You could try the Snowball Method, which means paying down your debts in order of size. Or the Avalanche Method, which prioritises your payments by interest rate.

First of all, debt consolidation simply means bringing multiple debts together into one payment via a personal loan with a reasonable interest rate. This can be a helpful option for people with multiple credit cards since it makes the payments more manageable. If you are starting to feel overwhelmed by your debts, you can read more about Wisr debt consolidation loans.

Our little pocket rocket, Wisr App, rounds up your daily purchases to help pay your debt down faster. Every little bit counts after all. You can download it on iOS or Android.

Keep up with your new budget and keep a close eye on cash flow. It’s important to try and have more coming in than going out.

As you see the situation improving, this will give you more encouragement and help you to stay on track for the long term.

And repeat. You’d be amazed how much progress you can make with a little tenacity and a proper strategy. As time goes by, you may notice your credit card debt gradually disappearing, and your credit rating improving at the same time.