Smash Your Credit Card Stress

If you’ve returned to work this year with money owing on your credit card, you’re not alone. Nearly half of all Australians fail to pay off their summer holiday spending within the first interest-free period. And almost half a million people expect it will take them a year or more to repay the money they owe.

It’s time to take control.

Taking control of your finances, including credit card debt, will help you to break free from credit card stress. And ultimately achieve the goal of becoming debt free. Here’s how you can change things for the better.

Face down your debt.

Debt doesn’t go away on its own. If you’ve been ignoring your finances, now is the time to take a deep breath and face up to the music. How much do you owe? How much do you need to pay to get back on track? You can use an online credit card repayment calculator to work this out. Enter your outstanding balance, interest rate and fees to find out what repayments you need to make.

Know your options.

So long as you have an income, you have options. It might be as simple as paying a little extra on your card for a month or two. Or you might decide you’re better off transferring, consolidating or refinancing.

Transferring your debt to a credit card with a balance transfer offer can give you up to 2 years with no interest on balances transferred at the time of approval. This can save you from building up more debt when you’re trying to pay it off, and help you feel you’re really getting somewhere.

Consolidating your debt into one personal loan with a lower interest rate than your credit card can give you a clear deadline for becoming debt-free. As a bonus, personal loans usually won’t let you to build up more debt either. This can be a good option for people with multiple loans or larger debts.

Refinancing your home loan is a way to take control of larger debts. Rolling credit card debt into your mortgage gives you a lower rate to repay. But don’t forget it also means you’ll be carrying that loan over the length of your loan term—which can be up to 30 years, and cost you more in the long run. If you think this might be the best way to take control of your debt talk to your mortgage broker. A good mortgage broker can help you to understand if this is a suitable option for you.

No matter what your finances look like right now, remember it’s just the start of the year. Take control and you could make this your best year yet.