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A credit card can be a useful piece of plastic to pay off for those purchases when you don’t have cash on you, or to consolidate your loans. However, it is often that Australians allow this small piece of plastic to create havoc in their finances and lives. We have five tips to stay atop of your credit card repayments, without the anxiety gripping sweat that could wake you up in the middle of the night.
Pay the minimum amount
Before you calculate other expenses make this one top priority. According to the Australian Bankers Association, we are currently winning in this sector with an average of 55% of credit card holders paying off their balance in full. 3-4% of their customers make the minimum monthly repayment. You can watch the digits roll down as you pay your minimum amount you each month. It will also help in reducing your overall balance which will be a much needed relief for you. You can create an automatic payment from a savings or transaction account that will prevent you from cheating yourself from making the payment each month.
Speak to a professional
Looking for someone who won’t judge your financial situation, but will walk you through a process that understands you? Then it’s time to speak to a professional, than choosing to suffer in silence. Life happens, and you find that you cannot get out of debt. It’s advisable to speak to a financial advisor who will help you asses and deal with your current financial situation. They can speak to your bank on your behalf to figure out a way forward.
Get internet banking
If you don’t have internet banking, make it a priority when you get your next payment. According to the Australian Bureau of Statistics 72% of Australians used the internet for banking transactions. It is a convenient way to do banking without entering a bank. You can get a banking app for free and do all your needed payments from your phone. So, when a notification comes through your phone telling you that you have been paid you can automatically pay off your card right there and then.
Calculate your monthly payments
Being prepared financially is one of the many ways you can prevent your debt from increasing. A credit card issuer sets the minimum monthly repayment you will have to pay on your credit card. It is advisable to aim for the full amount if possible, to eliminate accruing interest that will take years to pay off. The amount will vary from issuer to issuer, but it is usually calculated as 2 or 3 % of your closing balance. You could be paying a minimum dollar charge that costs $20 to $30.
Cut it
If your credit card is doing more harm than good, then cut it. Although it would be nice to imagine your debt disappearing along with the cut up card in your trash, it will still remain. However, a card that cannot be used will mean you won’t have accumulating debt. Avoid the urge to take on more credit as this will reflect badly on your credit history. Take it one step at a time when it comes to dealing with credit card debt.
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