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 March 24th, 2017
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Offers 0% p.a. interest rate on balance transfers for 18 months to help you manage your existing credit card balance. Earn 2 bonus Velocity Points in the first 3 months.
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
Citi Rewards Platinum Credit Card
Take advantage of the introductory long-term balance transfer offer and reduced annual fee in the first year.
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) Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 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. Also, enjoy an annual fee waiver in the first year.
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
St.George Vertigo Visa
Introductory offer of 0% p.a. for 12 months on balance transfers and 0% p.a. for 6 months on purchases, plus a low annual fee.
0% p.a. for 6 months (reverts to 13.24% p.a.) 0% p.a. for 12 months $55 p.a. Go to site More info
American Express Essential®  Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
14.99% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Go to site More info
NAB Premium Card
Benefit from premium credit card advantages including travel insurance, Platinum Concierge Service plus 0% p.a. for 24 months on balance transfers.
19.74% p.a. 0% p.a. for 24 months with a one off 3% balance transfer fee $90 p.a. Go to site More info
HSBC Low Rate Credit Card
This card comes with a balance transfer offer, a low interest rate and up to 55 days interest-free on purchases.
13.25% p.a. 0% p.a. for 15 months with 2% balance transfer fee $55 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on balance transfers for the first 18 months combined with a low annual fee.
13.99% p.a. 0% p.a. for 18 months with 3% balance transfer fee $59 p.a. Go to site More info
ANZ Low Rate
Take advantage of 0% p.a. for 16 months on balance transfers and a low ongoing interest rate on purchases.
12.49% p.a. 0% p.a. for 16 months with 2% balance transfer fee $58 p.a. Go to site More info
ANZ Low Rate Platinum
Enjoy platinum benefits with exclusive discounts, complimentary travel insurance and personal concierge. Also repay your credit card debt interest-free with 0% p.a. for 16 months on balance transfers.
11.49% p.a. 0% p.a. for 16 months with 2% balance transfer fee $99 p.a. Go to site More info
St.George Vertigo Platinum - Online Only Balance Transfer Offer
Enjoy a long-term balance transfer offer of 3% p.a. for 36 months when you apply online, plus complimentary insurance covers and a personal concierge service.
12.74% p.a. 3% p.a. for 36 months $99 p.a. Go to site More info

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 March 24th, 2017
$
$
months
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
NAB Classic Banking
$0 monthly account fees.
Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
0.01% 0.01% 0.00% $0 $0 / $0 Go to site More
ING DIRECT Orange Everyday Account
$75 cash bonus + Apple Pay available.
Get a competitive ongoing variable rate when linked with a Savings Maximiser.
0.00% $0 $0 / $0 Go to site More
Bankwest Qantas Transaction Account
Earn Qantas Points on eligible purchases and on your account balance.
Conditions apply.
0.01% 0.01% 0.00% $6 $0 / $0 Go to site More

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

How can I pay off my credit card debt?

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.

Can a maxed out credit card affect your loan application in Australia?

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.

I can't pay off my credit card in full this month. What does this mean and what are my options?

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.

What is the fastest way to get yourself out of credit card debt?

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

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

Interest rate

19.74

Annual fee

87
American Express Essential®  Credit Card
American Express Essential® Credit Card

Interest rate

14.99

Annual fee

0
HSBC Platinum Credit Card
HSBC Platinum Credit Card

Interest rate

19.99

Annual fee

149

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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 March 24th, 2017
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Earn 2 Velocity Points per $1 spent and save with a reduced annual fee and a 0% p.a. balance transfer offer for 18 months.
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 Qantas Credit Card
Receive 60,000 bonus Qantas Points on eligible spend within 3 months. Enjoy access to premium benefits and complimentary insurance.
19.99% p.a. $199 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on balance transfers for the first 18 months combined with a low annual fee.
13.99% p.a. 0% p.a. for 18 months with 3% balance transfer fee $59 p.a. 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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