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5 Easy Tips To Help You Pay Off Your Credit Card Debt

Credit card debt is quite possibly the worst kind of debt that you can carry

Credit card debt: thee words no one likes to utter.

And it’s not even a good type of debt. At least with a mortgage, there’s light at the end of the tunnel. When you make your last repayment, you own a home. Credit card debt is filthy.

Only loan sharks charge higher rates of interest - just - and it’s all too easy to spend what you’ve paid off the card in the previous month. Many of us have credit card debt, and many of us carry this debt like the proverbial ball and chain. It can weigh you down. Take the bolt cutters to the ball and chain and free yourself from the weight of credit card debt.

Here’s five tips to help you on the way:

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Make a commitment

Frugal is the new black.

First things first, make a commitment to paying off your card(s). This will mean a few sacrifices and becoming the embodiment of frugal. Tighten the belt. It may mean a few months of saying no to a night out, or dinner plans, but in the end you won’t be burdened by always having a credit card debt hanging over your head - in the end, it’s worth it.

St.George Vertigo Visa

Reduce interest repayments by transferring a balance

If you want to get a deal in addition to your credit card repayments and reduce the amount of interest you pay each month, a balance transfer is a great way to start.

  • $0 p.a. annual fee for the first year ($55 p.a. thereafter)
  • 13.24% p.a. on purchases
  • 0% p.a. for 14 months on balance transfers
  • Cash Advance Rate of 21.49% p.a.
  • Up to 55 days interest free
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Consider a balance transfer

Why should you give your bank your hard earned money?

Once you’ve made a commitment to paying down the balance of your card(s), it’s time to organise your finances. A budget will come soon, but before you budget consider a balance transfer. A balance transfer is a great way to cut down the extra cash you have to fork out each month in interest repayments. There are some great offers out there at the moment, so take advantage of them. This will mean opening up a new credit card with a new bank, but there’s no loyalty in banking anymore, right?

To give you an idea of the type of cash a balance transfer can save you, if you’re currently getting charged 20% on a $5,000 balance, transferring this debt over to a card with a 0% for 12 months balance transfer promotional offer will save you approximately $800. This is money you would have had to pay to the bank in interest. Not bad, aye?

You can compare balance transfer credit cards in the table below.

Rates last updated July 24th, 2017
Name Product Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee Product Description
Virgin Australia Velocity Flyer Card - Exclusive Offer
20.74% p.a.
0% p.a. for 18 months
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Apply by 31 July 2017 to earn bonus Velocity Points for the first three months and a $129 Virgin Australia Gift Voucher each year.
St.George Vertigo Platinum
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
Offers complimentary travel insurance, complimentary purchase insurance and access to a 24/7 personal concierge service.
Citi Rewards Platinum Credit Card
20.99% p.a.
0% p.a. for 24 months with 1.5% balance transfer fee
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Offers a long-term balance transfer. Earn extra points on eligible international spend, plus complimentary travel insurance.
St.George Vertigo Visa
13.24% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
Receive up to 55 days interest-free on purchases and the ability to make contactless payments with Visa payWave technology.
ANZ Platinum Credit Card - Exclusive Offer
0% p.a. for 3 months (reverts to 19.74% p.a.)
0% p.a. for 12 months
$0 p.a. annual fee for the first year ($87 p.a. thereafter)
Receive a low introductory offer of 0% p.a. on purchases for 3 months and 0% p.a. on balance transfers for 12 months.
HSBC Platinum Credit Card
19.99% p.a.
0% p.a. for 22 months with 2% balance transfer fee
$99 p.a.
Earn 1 Reward Point per $1 of eligible spend and receive complimentary travel and purchase protection insurances.
Bank of Melbourne Vertigo Platinum
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
Get a range of complimentary insurance covers, access to a 24/7 concierge and up to 55 days interest-free on purchases.
BankSA Vertigo Visa
13.24% p.a.
0% p.a. for 18 months
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
Get up to 55 days interest-free on purchases and be protected by 24/7 Falcon® Fraud service.
NAB Low Fee Card
19.74% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$30 p.a.
Receive complimentary purchase protection insurance, special offers from Visa Entertainment and up to 44 days interest-free on purchases.
HSBC Low Rate Credit Card
13.25% p.a.
0% p.a. for 15 months with 2% balance transfer fee
$55 p.a.
Receive up to 55 days interest-free on purchases. Also enjoy exclusive offers with the home&Away Privilege Program.
Virgin Money Low Rate Credit Card
11.99% p.a.
0% p.a. for 12 months
$99 p.a.
Receive up to 44 days interest-free on purchases and the optional insurance coverage of CreditShield Edge.
Westpac Low Rate Card - Online Only Balance Transfer Offer
13.49% p.a.
0% p.a. for 24 months with 2% balance transfer fee
$59 p.a.
Take advantage of 0% p.a. for 24 months on balance transfers with a 2% BT fee. Plus, the convenience of the Westpac mobile banking app.
NAB Low Rate Platinum Card
13.99% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$100 p.a.
Enjoy the protection of 7 complimentary insurances including overseas travel and purchase protection insurance.
ANZ Low Rate Platinum
11.49% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$99 p.a.
Enjoy platinum benefits with exclusive discounts, complimentary travel and purchase insurances and a 24/7 personal concierge.
American Express Essential®  Credit Card
14.99% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$0 p.a.
Get Smartphone Screen Insurance of up to $500 when you pay for your phone or contract with your Essential Credit Card.
Woolworths Everyday Platinum Credit Card
19.99% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
Receive a $100 eGift Card when you apply by 30 September 2017 and make an eligible purchase by 31 October 2017.
American Express Explorer® Credit Card
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$395 p.a.
Receive a $400 Travel Credit every year and up to two entries per year to the American Express Lounge at Sydney International Airport.

Compare up to 4 providers

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Come up with a budget

Plan, save, repay, repeat

Once you have an idea of how much your credit card repayments are going to be each month, it’s time to come up with a budget.

While you’re in ‘credit card debt reduction mode’, your discretionary income should be mainly used to pay down the balance of your card(s). That’s not to say you shouldn’t keep a few dollars aside (after you pay your bills and buy the necessities) for yourself, but remember what we said about becoming the embodiment of frugal? Any spare cash you have on hand should go towards your cards. The more you pay off your credit card(s) now, the less you will have to pay later.

Remember the saying, ‘a stitch in time saves nine’?

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Empty your savings

Say sayonara to your ‘rainy day’ savings

Following on from the last point, apply all your extra cash to the cards. This includes any money you have in savings accounts.

Rule of thumb: you will pay more on credit card interest repayments than the return you get from any savings account in the market. So it’s logical to move the cash from your savings and dump it on your card.

It might be a good idea to leave a little in your savings account for an emergency, you don’t want to have to use the card(s) again if you can help it. But be prepared to say sayonara to the cash you had sitting around for a ‘rainy day’ or a holiday.

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Pay the bills off one at a time

Start high then go low

This tip applies to people who have more than one credit card with a balance on it. It’s safe to assume that there’s a few people in this situation out there. To attack your credit card debt, pay the balance which attracts the highest rate of interest first, this balance will cost you the most in interest repayments - makes sense, right?

While you’re working at paying this balance down, make the minimum repayments on the other balances. When you’ve paid down the first debt, then move onto the balance which attracts the next highest rate of interest and so on.

Back to top

Following these simple tips can help you get out of your financial rut in almost no time. Just remember to stick to your budget and your commitment to being debt free.

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American Express Velocity Platinum Card
American Express Velocity Platinum Card

Interest rate

20.74

Annual fee

375
ANZ Platinum Credit Card - Exclusive Offer
ANZ Platinum Credit Card - Exclusive Offer

Interest rate

19.74

Annual fee

87
St.George Vertigo Platinum
St.George Vertigo Platinum

Interest rate

12.74

Annual fee

99

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