Credit card debt can be difficult to control. Learn about your options and ways to repay your credit card debt in this guide.
Credit card debt can be a real worry for many people, and clearing your credit card balance isn't always easy. Having a plan to repay your debt and methods to reduce interest charges will allow you to manage your current expenses whilst clearing your debt. Here are 7 practical steps you can follow to repay your credit card debt.
9 ways to repay your credit card debt sooner
Consolidate your debt with a balance transfer
Use a balance transfer card to repay your debt with a lower rate of interest, consolidate your debts in one place and help you save money on interest charges.
Pay more than the minimum payments
Only making the minimum payment will not significantly reduce your credit card debt. It is important to set up a plan to repay a portion of your existing debt every month, so you can clear your debt sooner.
Pay off the highest rate of interest first
Prioritise repaying your debts from the highest rate of interest and allocate repayments to them first. You can close each credit card account after you have repaid the balance in full to avoid any further charges.
Reduce your credit limit
Lowering your credit limit will prevent you from spending more, allowing you to make larger repayments to your debt.
If you can't afford to make more than the minimum payment every month you may need to reconsider your budget. By cutting back on unnecessary expenditures, you can reallocate these funds to your credit card payments and start clearing your debt.
Negotiate with your provider
If you're having real difficulties and are experiencing temporary hardship in repaying your outstanding balance, then contact your provider to renegotiate your payment plan.
Get help from a financial counsellor
Financial counsellors often provide free, confidential and independent services if you are having trouble repaying your credit card debt. Financial counsellors can provide suggestions on improving your current financial situation, assess eligibility for government assistance, assist in managing your finances and explore your options in debt recovery.
The following list of contacts can assist in providing financial counsel:
Financial Counsel Contact Number National debt hotline 1800 007 007 Financial Rights Legal Centre 1800 007 007 Tasmania - Consumer Credit Helpline (Hobart Community Legal Service) 1800 232 500 Victoria - MoneyHelp 1800 007 007 and Consumer Action Law Centre 03 9629 6300 South Australia - Consumer Credit Law Centre 08 8342 1800 Western Australia - Consumer Credit Legal Service 08 9221 7066
Stop using credit cards
If you want to clear your credit card debt then avoiding spending on credit cards may help you manage your budget. Cancelling or pausing your credit cards can be a great idea to control the temptation of purchasing on credit.
Use any savings and investments you have
Using your savings to repay debt can help eliminate your credit card debt sooner and reduce the amount of interest you have to pay.