Christmas and New Year is a time for celebration, joy, and giving; but it’s also a time that is renowned for racking up credit card debt.
Now that the festive season has ended the balance owing on your statement might seem overwhelming, but with a few lifestyle adjustments you can combat the credit card debt and get rid of it for good.
Cut out credit card spending
The first step is to stop using the card for new purchases while you pay off the existing debt. If you don’t already have a budget, now is the time to make one. Write down your fortnightly income, and then make a list of all your outgoing expenses. This will help you to clearly sort out your essential and non-essential spending habits, and figure out how much money is left over. Any extra cash left after your essentials have been taken care of should go towards paying off your credit card.
If you’re struggling with writing and sticking to a budget we recommend trying out some budgeting apps for your smartphone to help assist you. Check out our review of some of the most popular budgeting apps on the market to see what would work for you.
Prioritise payments
Credit cards typically have a substantial interest rate, which means it’s a good idea to get them paid off as quickly as possible. While making the minimum repayment amount each month will keep your head above water, it will take you a lot longer to pay off the card.
If you think it might be possible to tighten your existing budget, pump any extra cash into paying off your credit card. Contributing larger sums each month will save you money on interest and help you get your debt paid off sooner.
We have planned that I work off my normal weekly salary and any overtime I get will go straight into my MOVE Bank account. I plan to not use my credit card by hiding it and lowering the limit by $500 each time so I can pay it off.
-Ricky, MOVE Bank Member
Consolidating your credit card debt
Are you are juggling multiple debts? Debt consolidation might be the answer. Basically, you will take all your existing card debts and transfer them over into one larger debt to be paid off as a single payment.
This can be done a couple of ways including;
- Taking out a personal loan to pay out all of your credit card debt, leaving you with one single fortnightly repayment.
- If you have a home loan (and enough equity in your property), you could look at refinancing your credit card debt by adding it on to your home loan.
Personal and home loans generally have much lower interest rates than credit cards, so using these facilities can save you money on excess interest and help you get them paid off sooner. Consolidation can also make the payment process less stressful by combining multiple payments into one easily managed repayment. Find out more about MOVE Banks personal loan options here.
Want to get rid your credit card debt for good?
Contact MOVE Bank today and talk to one of our specialists about how we can help you get back on the road to financial well-being, or start your personal loan application online here.
This blog post is for general information purposes only and is not intended as financial or professional advice. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product or other professional advice. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article. Railways Credit Union Limited trading as MOVE Bank ABN 91 087 651 090. AFSL/ Australian Credit License number 234 536 | ABN 91 087 651
