Deliverance from Debt: Your Credit Card Management Guide

Kill your credit card debt with these 8 tips

Tip: #1: Pay on time

The first tip is obvious for some and not so for others. Drum-roll please…

Always pay your credit card debt on time! Doing this will keep your credit history intact. A bad credit rating means buckles chance of getting a loan, a mortgage or another credit card. The credit reporting system means lenders can see when you’ve missed a payment if you go to apply for another financial product. This is particularly important for people looking to transfer their credit card debt to another card under a balance transfer facility.

Low Balance Transfer Credit Cards

Tip: #2: Pay more than the minimum

If you can, pay more than the minimum payment required each month. Even better, pay the whole thing off each month and then start afresh.

Every little bit extra you can pay above the minimum each month will reduce the cash you have to fork out to cover interest charges down the track - this may mean a few sacrifices to get your debt under control.

If you have a $2,000 debt at just shy of 20% interest p.a. and you only pay the minimum amount each month of 2%, it will take you over forty years to pay back, and you will have paid over $5,000 in interest. However, pay an additional $50 above the minimum, you’ll pay the card off in three years and you will have paid just $500 in interest.

The numbers speak for themselves.

Tip: #3: Introductory offers should also be approached with caution

Whether it’s a balance transfer promotional offer or an introductory offer on purchases, if you can’t pay back the balance in the introductory period, don’t take the offer.

You need to know that the introductory period that you’re looking at is long enough to accommodate your repayment budget. Jumping at a 0% rate, failing to pay off your debt before the period expires, then being clobbered by a high regular rate of interest will be a disaster for your bank balance.

One tip here if you are looking for a balance transfer offer, is to check what the revert rates are if you are unable to repay the debt in time. Some cards revert to the purchase rate, whereas some revert to what is typically a higher cash advance rate. Learn more about which cards revert to their standard purchase rate and which don't.

What rate does my balance transfer revert to?

Long-Term Balance Transfer Credit Cards

Rates last updated June 27th, 2017
Name Product Product Description Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
NAB Premium Card
Enjoy Platinum benefits including complimentary travel insurance, a 24/7 concierge and Visa Front Line Access.
19.74% p.a.
0% p.a. for 20 months with 2% balance transfer fee
$90 p.a.
St.George Vertigo Platinum
A low rate Platinum card with up to 55 interest-free days on purchases and access to Visa's Platinum Concierge service.
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
Citi Rewards Platinum Credit Card
Earn Citi Reward Points on everyday spend and receive 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)
Bankwest Breeze Mastercard
Offers a low ongoing purchase rate and up to 55 days interest-free on purchases.
12.99% p.a.
0% p.a. for 21 months with 2% balance transfer fee
$59 p.a.
St.George Vertigo Visa
Save with a low variable purchase rate and up to 55 interest-free days.
13.24% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
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)
Bank of Melbourne Vertigo Platinum
Receive a range of complimentary insurances and access to a 24/7 Visa Platinum Concierge.
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
BankSA Vertigo Visa
Save with a low ongoing purchase rate and enjoy up to 55 days interest-free.
13.24% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
ANZ Platinum Credit Card - Exclusive Offer
An exclusive credit card offer through finder.com.au that includes complimentary insurance covers.
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)
HSBC Platinum Credit Card
Offers an annual fee refund with a yearly minimum spend of $6,000.
19.99% p.a.
0% p.a. for 22 months with 2% balance transfer fee
$99 p.a.
HSBC Low Rate Credit Card
Enjoy the benefits of the home&Away Privilege Program and the ability to pay using Apple Pay.
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 and access to Visa Global Customer Assistance Services.
13.99% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$59 p.a.
Westpac Low Rate Card - Online Only Balance Transfer Offer
Offers a low introductory rate on purchases and up to 55 interest-free days.
13.49% p.a.
0% p.a. for 24 months with 2% balance transfer fee
$59 p.a.
American Express Essential®  Credit Card
Earn 1.00 Membership Rewards point per $1 spent on eligible purchases.
14.99% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$0 p.a.
Suncorp Clear Options Platinum Credit Card - Exclusive Offer
Earn Suncorp Rewards Points per $1 spent and enjoy complimentary international travel insurances.
20.74% p.a.
0% p.a. for 18 months
$99 p.a. annual fee for the first year ($129 p.a. thereafter)
ANZ Low Rate Platinum
A platinum card with a competitive low rate and a range of complimentary insurances.
11.49% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$99 p.a.
ANZ Low Rate
Receive up to 55 days interest-free on purchases, up to 3 additional cardholders at no cost and Mastercard PayPass.
12.49% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$58 p.a.
Virgin Money Low Rate Credit Card
Enjoy a low ongoing purchase rate and the optional protection of CreditShield Edge.
11.99% p.a.
0% p.a. for 12 months
$99 p.a.
American Express Velocity Platinum Card
Receive 100,000 bonus Velocity Points on eligible spend within the first 3 months.
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$375 p.a.
American Express Explorer® Credit Card
Receive 50,000 Membership Rewards Bonus Points on eligible spend within the first 3 months of card membership.
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$395 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

Tip: #4: Haggle with your provider

Competition is fierce among credit card providers. They are always keen to keep their customers on board. You can ask your lender for an interest rate review. What’s the worst that can happen - they say, ‘no’? Your provide is all too aware of the promotional offers they give new customers, and the offers other banks can provide to you if you jump ship. They’re not going to see you walk away for the sake of a slight adjustment in your interest rate.

Tip: #5: Limit yourself

Credit limit increase invitations are something you have to agree to receive from the bank. But who’s ever heard of a credit limit decrease invitation? No one, that’s who. That’s because they don’t exist.

Your bank wants to see you continue to use the card, that’s because most of us are debt revolvers - carrying a balance from month to month. This is where the lender makes their money. Why not lower your credit limit as you pay your card off? This will stop you from spending the money you’ve paid off the card.

Just remember, each time you apply for a credit limit increase, it gets recorded on your credit file.

Tip: #6: Use cash whenever possible

Cash is king! Try to use cash where you can. Using cash makes it easier to stay out of debt. Of course, this may not be practical all the time, especially since buying a car with cash is likely to earn you a visit from the drug squad. Whether you're using cash or a debit card (which is really just electronic cash), it's cash is a great way to only spend what you have.

Rates last updated June 27th, 2017
Name Product Product Description Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
St.George Vertigo Platinum
Take advantage of a 0% p.a. for 20 months on balance transfers offer with no balance transfer fee.
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
HSBC Platinum Credit Card
Take advantage of a 0% p.a. for 22 months on balance transfers offer with a 2% p.a. balance transfer fee.
19.99% p.a.
0% p.a. for 22 months with 2% balance transfer fee
$99 p.a.
HSBC Platinum Qantas Credit Card
Enjoy complimentary membership to the Qantas Frequent Flyer program and the ability to pay with Apple Pay.
19.99% p.a.
$199 p.a.

Compare up to 4 providers

Tip: #7: If you have a debt on your credit card, make sure it's a low rate

Always check to understand what interest rate your credit card offers. Not all credit cards have the same rate and the variance is quite large. Check out some of the low rate cards in market at the moment.

Low Interest Rate Credit Cards

Tip: #8: Ask about hidden charges

We’re all aware of credit card surcharges, the extra fees that comes with buying a flight online, for example, can make you cringe. In some cases it can be beneficial to use an escrow service, like paypal, to pay for goods or services that attract a credit card surcharge.

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Frequently Asked Questions

To pay off your credit card debt it's important to put together a debt repayment plan. If you're currently paying a high interest rate, it's worth considering a balance transfer to give you some relief on those interest charges. You should always pay back more than the minimum repayment amount on your credit card each month. Check your most recent credit card statement - by law, banks now have to include information on how long it will take to repay your credit card balance if you only repay the minimum amount each month.

Yes. When reviewing your loan application (whether it be for a personal loan or home loan), the bank is assessing your ability to repay the loan amount. Accessible credit through your maximum credit limit on your card, is considered a risk and the bank generally makes their risk assumptions by calculating your repayment ability on the new loan based on the maximum credit limit on your existing credit cards being fully utilised.

The most important step is to call your bank and ask for a payment extension. If you can extend the payment amount to a date which will give you enough time to repay the balance in full that would stop your balance rolling over in to the next statement period, which would then remove the benefit of the interest free days period on your card.

There is not one specific way to get out of credit card debt the fastest, but the tips on this page above will definitely get out off to a good start. The first step is to look in to reducing your interest rates - consider one of the balance transfer cards we compare to get you started in that process.

Got any extra tips? Let us know how you deal with credit card debt.
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Read more on this topic

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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2 Responses to Deliverance from Debt: Your Credit Card Management Guide

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    sunny | April 10, 2013

    how do credit cards work

Credit Cards Comparison

Rates last updated June 27th, 2017
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) Go to site More info
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. Go to site More info
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) Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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