There has recently been a deluge in articles exploring the extremely high level of credit card debt that Australia has. Check out this ABC article for instance. Through first hand experience we have seen the scale of Australia’s credit card debt problem and the financially devastating results that mismanagement of credit cards can have.

In some cases the size of someone’s credit card debt is so high that bankruptcy or a debt agreement are the only real solutions. However, there are many people out there with manageable credit card debt that need a little guidance and help on how to go about getting their credit card debt back under control.

To stay on top of your credit card debt you should:

  1. Stop using your credit cards.
  2. Understand your interest charges and when monthly repayments are due.
  3. Focus on paying off the largest debts incurring the most interest first.
  4. Consider balance transfers.

Stop using your credit cards

Simple right? We understand that sometimes things happen that mean you need to access cash you don’t have. That’s fair enough. However, credit cards also make it easy to buy things that you don’t need with money that you don’t have. If you’re struggling with credit card debt it’s usually because of your spending habits. The simplest way to fix that? Cut your cards up.

Know your interest

While the interest rate on a home loan might only be 5 or 6 per cent, when it comes to credit cards this can be significantly higher – often as much as 20 per cent. This means you will be paying a lot more than you borrow in the long run.

Working out exactly how much you will pay with this interest rate lets you budget carefully for the long term. Keep in mind that if you don’t make minimum repayments on a credit card, you can be charged extra interest and fees.

Pay off your largest debts first

Given the high level of interest being charged on credit cards it’s important that you’re paying off your highest credit cards first and as quickly as possible. Otherwise you will continually lose money through the increased interest charges.

Consider balance transfers

If you’re struggling to make any headway with your credit card debt and the interest keeps accruing perhaps you should consider a balance transfer to a new card? Often these balance transfer deals will give you a new credit card which is interest free for the first years (and sometimes longer). This will allow you to essentially freeze your interest and focus on paying down the core credit card debt.

If you’re looking for some help with your credit card debt get in touch on 1300 4 CACTUS or email us at

Posted on 05-05-16 in Debt management, Personal finance insights and updates.