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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) annual fee
  • 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 June 23rd, 2017
Name Product Product Description Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Exclusive Offer
Earn 2 Velocity Points on top of the standard earn rate per $1 spent in the first 3 months, plus a $129 Virgin Australia Gift Voucher each year.
20.74% p.a.
0% p.a. for 18 months
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
HSBC Platinum Credit Card
Earn 1 Reward Point per $1 of eligible spend and receive complimentary travel and purchase protection insurances.
19.99% p.a.
0% p.a. for 22 months with 2% balance transfer fee
$99 p.a.
ANZ Platinum Credit Card - Exclusive Offer
Receive a low introductory offer of 0% p.a. on purchases for 3 months and 0% p.a. on balance transfers for 12 months.
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)
St.George Vertigo Visa
Receive up to 55 days interest-free on purchases and the ability to make contactless payments with Visa payWave technology.
13.24% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
HSBC Low Rate Credit Card
Receive up to 55 days interest-free on purchases. Also enjoy exclusive offers with the home&Away Privilege Program.
13.25% p.a.
0% p.a. for 15 months with 2% balance transfer fee
$55 p.a.
NAB Low Rate Credit Card
Receive up to 55 days interest-free on purchases, special offers from Visa Entertainment and Tap and Pay capabilities.
13.99% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$59 p.a.
Citi Rewards Platinum Credit Card
A long-term balance transfer offer with the Citi Rewards Platinum Card. Earn extra points on eligible international spend, plus complimentary travel insurance.
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)
NAB Premium Card
Benefit from premium credit card advantages including travel insurance, Platinum Concierge Service plus 0% p.a. for 20 months on balance transfers.
19.74% p.a.
0% p.a. for 20 months with 2% balance transfer fee
$90 p.a.
American Express Essential®  Credit Card
Get Smartphone Screen Insurance of up to $500 when you pay for your phone or contract with your Essential Credit Card.
14.99% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$0 p.a.
St.George Vertigo Platinum
Offers complimentary travel insurance, complimentary purchase insurance and access to a 24/7 personal concierge service.
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
ANZ Low Rate Platinum
Enjoy platinum benefits with exclusive discounts, complimentary travel and purchase insurances and a 24/7 personal concierge.
11.49% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$99 p.a.
NAB Low Fee Card
Receive complimentary purchase protection insurance, special offers from Visa Entertainment and up to 44 days interest-free on purchases.
19.74% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$30 p.a.
NAB Velocity Rewards Premium Card
Offers up to 1 Velocity point per $1 on purchases, combined with complimentary insurance covers and a concierge service.
19.99% p.a.
0% p.a. for 6 months
$150 p.a.
NAB Velocity Rewards Card
This dual Amex and Visa card offers up to 0.75 Velocity Points per $1 spent on eligible purchases and special Visa Entertainment offers.
19.99% p.a.
0% p.a. for 6 months
$95 p.a.
NAB Qantas Rewards Card
A dual Amex and Visa card that allows you to earn up to 0.75 Qantas Points per $1 spent, plus complimentary purchase protection insurance.
19.99% p.a.
0% p.a. for 6 months
$95 p.a.
NAB Rewards Classic Card
Earn 0.75 NAB Rewards Points per $1 spent and receive complimentary purchase protection insurance.
19.99% p.a.
0% p.a. for 6 months
$95 p.a.
NAB Rewards Platinum Card
Collect 50,000 bonus points when you spend $2,500 on everyday purchases within 60 days of account opening.
19.99% p.a.
0% p.a. for 6 months
$195 p.a.
Woolworths Everyday Platinum Credit Card
Receive a $100 eGift Card when you apply by 30 June 2017 and make an eligible purchase by 31 July 2017.
19.99% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($49 p.a. thereafter)

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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Related Posts

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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