How can I get rid of my credit card debt?

Information verified correct on May 24th, 2017

Practical and simple steps you can take to finally pay off your credit card balance for good.

If you’re struggling to deal with credit card debt, take heart. You are not alone and you are not without help. Many people experience credit card debt and find a way through it. With sufficient motivation, time and discipline, you too can enjoy financial freedom again. This guide will take you through the simple steps and tips that you can use to get rid of your credit card debt.

How to get rid of your credit card debt

It’s hard to know where to start when you have a lot of debt to deal with. These steps are designed to form a path to financial freedom, and even following them one at a time will help you along the way.

  1. Avoid making new purchases. To get rid of your debt, you must first stop adding to it. Stop spending and start using that money to pay down your existing balance. Remember that your ultimate goal is to be debt free. You can treat yourself again once you’ve achieved that.
  2. Calculate the total amount of money you owe. It’s time to face the hard truth. This process might be painful, but it is necessary and short-lived. Get all your account balances together and make a list. Include your debt amounts, the interest you’re paying on each of those amounts and any other charges. Sum them up and take a good, long, hard look before you say your goodbyes.
  3. Create a budget. Now that you have your total debt amount calculated from step 2, create your budget. Start with your monthly income and figure out your essential monthly expenses. It’s time for tightening measures, so expenses should include only the bare necessities such as bills, groceries, petrol and other living expenses you feel you need. After establishing your income and expenses, it’s time to create a monthly schedule for repaying your debts. Work out how much you can pay off each month, but be practical and leave a margin for error or emergencies. This budget planner could be helpful.
  4. Set up automated payments. Using your budgeted monthly repayment amount from step 3, set up automated credit card payments to make sure you actually do what you plan to. Set up the payments to come out of your bank account the day after you receive your wages. This is a sure-fire way to stay committed to your budget.
  5. Contact your credit card provider. This isn’t a compulsory step, but if you’re feeling truly overwhelmed by your debt, it might be worthwhile appealing to your credit card provider for a renegotiation of terms. Creditors are sometimes willing to allow a temporary postponement of payments or a slightly more favourable interest rate. Generally they would rather give you a discount than risk you defaulting on your debt.
  6. Consider a balance transfer. Balance transfers can buy you time to repay your debt without incurring any more interest. This is because balance transfer credit cards offer low or 0% interest on your transferred debt for a promotional period of time, sometimes for as long as 24 months. This might be exactly what you need to get rid of that debt more quickly, not to mention what you will save on interest fees that add hundreds of dollars to your debt every year.
What if I have multiple credit card debts?
  • Consolidate your debts onto one card. This follows on from step 6, where you can consider a balance transfer to help with your debt consolidation. As well as giving you the opportunity to save money on otherwise expensive interest fees for a promotional period of time, this will mean you only have to pay off one account. It could also help you save on additional charges, such as credit card annual fees.
  • Pay off the card with the highest interest rate first. This stems from one school of thought, which assumes that you will save the most money by paying off the account with the highest interest rate first, followed by the account with the next highest interest rate and so on. Naturally, you would still have to make minimum repayments on your other cards during this time.
  • Pay off the card with the lowest balance first. For some people, paying off the card with the lowest balance first is more motivating. This strategy will reduce the number of outstanding accounts sooner and cuts down on interest charges in the process. Of course, you would still also need to make minimum repayments on your other cards at the same time.

credit-card-advise

Other tips to help get rid of credit card debt

In addition to the steps above, following these tips can also prove very helpful:

  • Switch to a card with a lower annual fee. This helps with reducing overall expenses, but can be doubly effective when combined with a balance transfer offer. If you want to minimise your outgoing card fees, you should consider a 0% balance transfer credit card with no annual fee.
  • Cancel cards you don’t use. This tip will help save on annual fees and other charges that you may be paying on your cards. Also, this will help reduce the temptation to spend more money.
  • Use your savings. Since your savings account could never offer an interest rate as high as the one you’re probably paying on your credit card, it follows that you should be using your savings to pay off your credit card debts. Use the cash under your bed, that rainy-day fund and every penny you can find to pay off those debts, because they’ll just swell up with interest if you don’t. And once they’re paid off, you’ll have more money you can put towards your savings.
  • Make weekly payments. Even though your statement comes monthly, credit card interest is actually calculated on a daily basis. This means that increasing the frequency of your payments can help to reduce the total interest you pay over time.
  • Request a hardship variation. If you’ve recently experienced financial difficulty due to verifiable circumstances such as poor health or unemployment and you’re struggling to make repayments, you can apply to your issuer for financial hardship variation by phone or in writing. Your credit card provider is obliged by law to consider and respond to this request. If successful, you will be granted temporary relief from your debt repayment. This could include payment postponement, an extended payment time frame or a temporary interest freeze. This can provide some relief in the short-term but is only a temporary measure.
  • Seek professional help. Gaining control over your debts can be very difficult, especially at the beginning. It can be helpful to get professional advice and there are even a range of free services for debt management that you can consider.

Credit card debt can often seem overwhelming, but by following these steps and tips to help you get rid of credit card debt you can make lasting and sustainable changes in your financial life.

9 to 24 month Balance Transfer Credit Cards Offers

Rates last updated May 24th, 2017.

HSBC Platinum Credit Card

Balance transfer offer has been changed to 0% p.a. for 22 months and is valid until 31 August 2017.

May 8th, 2017

Citi Rewards Platinum Credit Card

Balance transfer offer has been extended until 30 June 2017.

May 12th, 2017

American Express Velocity Platinum Card

Bonus points offer has changed from 50,000 to 100,000 which is valid until 31 July 2017.

May 16th, 2017

View latest updates

Jonathan Choi Jonathan
$
% p.a.

Your search criteria didn't return any products. Click to reset your filter options and search again
Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Interest Saved
NAB Premium Card
Enjoy Platinum benefits including complimentary travel insurance, a 24/7 concierge and Visa Front Line Access.
0% p.a. for 24 months with 3% balance transfer fee 19.74% p.a. $90 p.a. Go to site More info
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.
0% p.a. for 20 months 12.74% p.a. $99 p.a. Go to site More info
Citi Rewards Platinum Credit Card
Earn Citi Reward Points on everyday spend and receive complimentary travel insurance.
0% p.a. for 24 months with 1.5% balance transfer fee 20.99% p.a. $49 p.a. annual fee for the first year ($149 p.a. thereafter) Go to site More info
St.George Vertigo Visa
Save with a low ongoing purchase rate and up to 55 interest-free days.
0% p.a. for 14 months 13.24% p.a. $0 p.a. annual fee for the first year ($55 p.a. thereafter) Go to site More info
Virgin Australia Velocity Flyer Card - Exclusive Offer
Take advantage of 0% p.a. for 18 months on balance transfers without a BT fee. Plus, receive a $129 Virgin Australia Gift Voucher each year.
0% p.a. for 18 months 20.74% p.a. $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ANZ Platinum Credit Card - Exclusive Offer
An exclusive credit card offer through finder.com.au that includes complimentary insurance covers.
0% p.a. for 12 months 0% p.a. for 3 months (reverts to 19.74% p.a.) $0 p.a. annual fee for the first year ($87 p.a. thereafter) Go to site More info
HSBC Platinum Credit Card
Offers an annual fee refund with a yearly minimum spend of $6,000.
0% p.a. for 22 months with 2% balance transfer fee 19.99% p.a. $99 p.a. Go to site More info
NAB Low Fee Card
Receive up to 44 interest-free days on purchases and complimentary Purchase Protection Insurance.
0% p.a. for 18 months with 3% balance transfer fee 19.74% p.a. $30 p.a. Go to site More info
HSBC Low Rate Credit Card
Enjoy the benefits of the home&Away Privilege Program and the ability to pay using Apple Pay.
0% p.a. for 15 months with 2% balance transfer fee 13.25% p.a. $55 p.a. Go to site More info
Westpac Low Rate Card - Online Only Balance Transfer Offer
Offers a low introductory rate on purchases and up to 55 interest-free days.
0% p.a. for 24 months with 2% balance transfer fee 13.49% p.a. $59 p.a. Go to site More info
NAB Low Rate Credit Card
Receive up to 55 days interest-free on purchases and access to Visa Global Customer Assistance Services.
0% p.a. for 18 months with 3% balance transfer fee 13.99% p.a. $59 p.a. Go to site More info
American Express Essential®  Credit Card
Earn 1.00 Membership Rewards point per $1 spent on eligible purchases.
0% p.a. for 12 months with 1% balance transfer fee 14.99% p.a. $0 p.a. Go to site More info
Suncorp Clear Options Platinum Credit Card - Exclusive Offer
Earn Suncorp Rewards Points per $1 spent and enjoy complimentary international travel insurances.
0% p.a. for 18 months 20.74% p.a. $99 p.a. annual fee for the first year ($169 p.a. thereafter) Go to site More info
Bank of Melbourne Vertigo Platinum
Receive a range of complimentary insurances and access to a 24/7 Visa Platinum Concierge.
0% p.a. for 20 months 12.74% p.a. $99 p.a. Go to site More info
ANZ Low Rate Platinum
A platinum card with a competitive low rate and a range of complimentary insurances.
0% p.a. for 16 months with 2% balance transfer fee 11.49% p.a. $99 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.
0% p.a. for 16 months with 2% balance transfer fee 12.49% p.a. $58 p.a. Go to site More info
BankSA Vertigo Visa
Save with a low ongoing purchase rate and enjoy up to 55 days interest-free.
0% p.a. for 14 months 13.24% p.a. $0 p.a. annual fee for the first year ($55 p.a. thereafter) Go to site More info
Bankwest Breeze Mastercard
Offers a low ongoing purchase rate and up to 55 days interest-free on purchases.
0% p.a. for 21 months with 2% balance transfer fee 12.99% p.a. $59 p.a. Go to site More info
Virgin Money Low Rate Credit Card
Enjoy a low ongoing purchase rate and the optional protection of CreditShield Edge.
0% p.a. for 12 months 11.99% p.a. $99 p.a. Go to site More info
American Express Velocity Platinum Card
Receive 100,000 bonus Velocity Points on eligible spend within the first 3 months.
0% p.a. for 12 months with 1% balance transfer fee 20.74% p.a. $375 p.a. Go to site More info
Bankwest Zero Platinum Mastercard
Receive complimentary travel insurance & pay no foreign transaction fees.
2.99% p.a. for 9 months 17.99% p.a. $0 p.a. Go to site More info
American Express Explorer® Credit Card
Receive 50,000 Membership Rewards Bonus Points on eligible spend within the first 3 months of card membership.
0% p.a. for 12 months with 1% balance transfer fee 20.74% p.a. $395 p.a. Go to site More info
Back to top
Was this content helpful to you? No  Yes

Related Posts

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback