Credit card got you feeling stressed? We've been there. Here's our guide to wrestling back control of your finances, paying down your debts and getting back to a good night's sleep minus the credit nightmares.
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.
1. Stop using your credit card.
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.
2. Get organised.
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!
3. Develop a strategy.
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.
4. Consider debt consolidation.
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.
5. Use technology to your advantage.
6. Track your progress.
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.
7. Stick with it.
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.
Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.