woman-calculating-repayments-shutterstock

How to deal with credit card debt

Beat your credit card debt with a strong strategy for achieving financial freedom.

If you find yourself filled with dread at compounding interest fees and struggle to make monthly repayments on your credit card, you are not alone. As of 2016, there were more than 16 million credit cards in circulation in Australia. This translates into a whopping national debt of approximately $32.5 billion. On average, an Australian credit card holder makes a monthly repayment of $1,716 and carries an interest-accruing balance of $1,950 (see here for more stats). At that rate, it’s little surprise that one in three Australians also default on their credit card payments.

Since defaulting on your credit card payments is best avoided (particularly if you want to remain eligible for any form of credit over the next five to seven years), it’s important to take positive steps to regain control over, and ultimately eliminate, your debt.

Use this guide to discover how you can manage your credit card debt and achieve financial freedom.

How to manage your credit card debt

Develop a strong strategy by implementing a combination of these tips. Your plan will be more likely to succeed if you act on at least three of the suggestions below.

  • Talk to a credit advisor. Seeking professional advice is often the first step towards financial freedom. A credit advisor or debt counsellor can offer practical financial tips on budgeting and creating a feasible repayment plan. If you’re hesitant about spending money you don’t have on such a service, free help for debt management is also available. See our free budget planner for more tips on organising your finances when managing debts.
  • Create a repayment plan. A repayment plan is essential when it comes to chipping away at your debt. Many borrowers fall into the mentality of thinking they just need to make the minimum monthly repayments on their credit card. The wiser move is to pay off as much debt as soon as possible. This will help minimise interest charges over the long term. Establish a budget, designate your monthly repayment amounts beforehand, then stick to the plan!
  • Get a 0% balance transfer credit card. Consider applying for a new balance transfer credit card. These balance transfer promotions can often offer you 0% interest on your debt for up to 24 months. This can result in substantial interest savings on your debt if you’re able to repay the full amount before the interest-free promotional period ends. With these promotions, it’s important to also factor in a possible balance transfer fee (up to 3% of your transferred balance) and the reverting interest rate that will kick in once your promotional period ends. All things considered, however, a 0% balance transfer credit card could be just the tool you need to take control of your debt.
  • Reduce your expenses. Reducing your expenditure will mean creating less credit card debt moving forward and availing more immediate funds for paying off existing debt. It will also help you develop smart spending habits to avoid falling into debt again.

Compare 0% Balance Transfer Credit Cards

Rates last updated September 22nd, 2017
$
% p.a.

Your search criteria didn't return any products. Click to reset your filter options and search again
Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
NAB Premium Card - Exclusive Offer
0% p.a. for 24 months
19.74% p.a.
$90 p.a.
Until 1 October 2017, exclusive to finder.com.au, enjoy a no BT fee, balance transfer offer with platinum privileges, including travel insurance.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
0% p.a. for 18 months
20.74% p.a.
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Earn up to 60,000 bonus Velocity Points in the first 3 months on eligible spend and enjoy a discounted annual fee of $64 for the first year.
Westpac Low Rate Card - Online Only Balance Transfer Offer
0% p.a. for 24 months with 2% balance transfer fee
13.49% p.a.
$59 p.a.
Take advantage of 0% p.a. for 24 months on balance transfers with a 2% balance transfer fee. Plus, use of the Westpac mobile banking app.
Citi Rewards Platinum Credit Card
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)
Apply by 30 September 2017 to receive a long-term BT offer, to earn Citi Reward Points on everyday spend and receive complimentary travel insurance.
HSBC Platinum Credit Card
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
$99 p.a.
Earn 1 Reward Point per $1 of eligible spend and receive complimentary travel and purchase protection insurances.
Qantas American Express Ultimate Card
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
$450 p.a.
Take advantage of a high Qantas Points earn rate and 2 American Express Airport Lounge entries each calendar year.
HSBC Low Rate Credit Card
0% p.a. for 15 months with 2% balance transfer fee
13.25% p.a.
$55 p.a.
Receive up to 55 days interest-free on purchases. Also enjoy exclusive offers with the home&Away Privilege Program.
Woolworths Everyday Platinum Credit Card
0% p.a. for 14 months
19.99% p.a.
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
Receive a $50 eGift Card when you apply by 31 December 2017 and make an eligible purchase by 31 January 2018.
ANZ Platinum Credit Card - Exclusive Offer
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)
An exclusive credit card offer through finder.com.au that offers 0% on purchases and balance transfers and complimentary insurance covers.
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
0% p.a. for 18 months
20.74% p.a.
$129 p.a.
Apply by 31 October 2017 to receive a no fee balance transfer and a $129 Virgin Australia Gift Voucher each year.
American Express Essential®  Credit Card
0% p.a. for 12 months with 3% balance transfer fee
14.99% p.a.
$0 p.a.
Receive a $50 credit when you apply online, are approved and spend $750 on your new card within the first 3 months of card membership.
NAB Low Fee Card
0% p.a. for 16 months with 2% balance transfer fee
19.74% p.a.
$30 p.a.
Receive complimentary purchase protection insurance, special offers from Visa Entertainment and up to 44 days interest-free on purchases.
Virgin Money Low Rate Credit Card
0% p.a. for 12 months
11.99% p.a.
$99 p.a.
Receive up to 44 days interest-free on purchases and the optional insurance coverage of CreditShield Edge.
ANZ Low Rate Platinum
0% p.a. for 16 months with 2% balance transfer fee
11.49% p.a.
$99 p.a.
Enjoy platinum benefits with exclusive discounts, complimentary travel and purchase insurances and a 24/7 personal concierge.
Citi Platinum Credit Card - 100k Bonus Points
0% p.a. for 15 months with 1% balance transfer fee
20.99% p.a.
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Earn 100,000 Reward Points, take advantage of a long-term balance transfer offer and receive complimentary travel insurance.

Compare up to 4 providers

Read more about 0% balance transfer credit cards

Working yourself out of debt might be a long-term challenge, but remember that your debt didn’t appear overnight either. With a strong desire for financial freedom, some discipline and commitment to your repayment plan, you can reduce, or eliminate your debt. Plus, you’ll also learn how to better manage your money through the experience.

Back to topPicture: Shutterstock

Sally McMullen

Sally McMullen is a journalist at finder.com.au who is a credit cards, frequent flyer and travel money expert by day and music maven by night.

Was this content helpful to you? No  Yes

Related Posts

NAB Premium Card - Exclusive Offer
NAB Premium Card - Exclusive Offer

Interest rate

19.74

Annual fee

90
Qantas American Express Ultimate Card
Qantas American Express Ultimate Card

Interest rate

20.74

Annual fee

450
NAB Low Rate Credit Card
NAB Low Rate Credit Card

Interest rate

13.99

Annual fee

59

Ask an Expert

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

Finder only provides general advice and factual information, so consider your own circumstances, read the PDS or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms and Conditions and Privacy Policy.
Ask a question
feedback