Credit Card Debt Help
Is your credit card debt out of control? Are you in over your head with missed repayments, high interest and mounting fees? It sounds like you have fallen into the credit card debt trap!
55% of Australians have a credit card and our collective debt is close to $50 billion. The average amount owing on a single credit card in Australia is near $3700 and more than 8 million Aussies have more than 1 card. If you think that sounds like a lot of money, you are right. Especially considering 80% of Aussie credit card owners are earning less than $45,000 per year. With figures like these, it isn’t any wonder more and more Aussies are struggling with their credit card repayments.
Credit Card Debt in Australia
More often than not, it all starts with one bill. One emergency purchase you didn’t see coming and it has to go on your credit card. Before you know it you are stuck chasing your tail, paying off your credit card, but then using your credit card to pay off your bills. Then around you go until you reach your credit limit and you have no idea where to turn. Sound familiar? This is the credit card debt trap and thousands of Aussies find themselves in this situation every year.
Credit Card Debt Warning Signs
Many people don’t realise they are struggling with their finances until it’s too late! Being experts in debt management, Debt Rescue is able to pin point some warning signs indicating when your credit card is getting out of control. You could be experiencing one, or several of the following points. If this is the case, you could be at risk of falling into a credit card debt trap.
- You don’t know when your bills are due and have to rely on your credit card to pay unexpected debts
- You don’t consider the repayments before using your card to make a purchase
- You don’t know exactly how much you owe on your credit card
- You have several credit cards, all owing money
- You never seem to have money left at the end of your pay week.
If this sounds like you, don’t worry. There are some things you can do to get your spending under control.
How to pay off your credit card debt
You might owe hundreds or thousands of dollars to your credit card, but the fact you are here means you have taken the first step towards paying off your debt. Here are a few more things you can do to pay down your credit card debt.
Stop using your card
There is no point paying off your debt one day and then putting it back on your card the next. To get rid of your credit card debt once and for all, stop using your card. If you rely on your card for essential expenses, like paying bills, you should plan ahead with a budget to ensure you can pay these costs without your card.
Pay more than the minimum
The minimum repayment amount is calculated to benefit your credit card supplier. By only paying the minimum, you will end up paying thousands of dollars in interest and it could take decades to repay your debt. Pay as much as you can possibly afford each pay cycle. Be sure you aren’t leaving yourself short-changed for your other expenses. A budget will help with this process.
Once you have worked out a budget and know how much you can afford to repay set up a direct debit each pay day from your bank account to your credit card.
Credit Card Debt Consolidation
If you have more than one credit card or your credit card is impacting your ability to repay other personal loans, you might be able to consolidate your debt. There are 2 options when it comes to credit card debt consolidation which might give you some much needed breathing room to pay down your debt.
The first option is to consolidate your balances onto one card. Many banks will offer a credit card with a 0% interest rate on balance transfers for a set period of time. This form of credit card debt consolidation is to transfer the balance of your existing cards onto this new card and it will give you an interest free period to pay off your debt. It could be anywhere from 3 to 12 months. When you apply for a 0% balance transfer card, always ask the maximum amount you can transfer as you might only be able to transfer a portion of your debts to this card. If this is the case, pay off the remaining debt from your old cards aggressively and move onto your interest free debt once the others have been repaid.
The second option is to apply for a debt consolidation loan. This can include personal and other unsecured debts as well. A Debt Consolidation loan is when you apply for a loan large enough to pay off your existing debts, then you are left with one loan, one interest rate and one regular repayment. You can also consolidate your debts to be included in your mortgage, but this method could cost you more in the long run.
If your debts are out of control
If you are struggling to make the repayments and have fallen behind with your debts, you might need to take a more aggressive approach to your finances. If you can’t keep up with the repayments and are at your wits end, give Debt Rescue a call. Our case managers will go through your finances with a fine toothed comb and create a personalised plan for you to recover from your debts. You might be able to ask your creditors for financial hardship, save money through budgeting, consolidate your debts or eve apply for a government administered debt agreement. For a no obligation, free and balanced chat about your next step, call us today on 1800 00 3328.