Credit Card Control

05 Mar Credit Card Control

Credit card control

Most people we see with serious debt have a fair proportion of credit cards or store cards. Credit cards are often used to get through the tough times such as unemployment or sickness. These cards quickly become maxed out and high interest rates contribute to a debt spiral.

Debt has become the norm in Australia, where we currently pay interest on around $33 billion of credit card debt at an average interest rate of 17%.

Australians pay $14.5 million in interest every day.

The trouble with that, is that all the interest you’re paying stops you getting ahead financially. It’s hard to get rid of credit card debt if you’re paying hundreds of dollars a year in personal debt interest. Added to the problem is that the “Default Rate” of interest on lots of cards can be as high as 29.99% so when you miss a payment you slide further into debt. There is nothing more soul destroying than paying a few hundred dollars off your credit card only to see that only a small amount of your payment actually reduces what you owe, with the rest going on interest.

Are you in control?

Here are a few quick tips to how you can control your credit card:

        1. Try to keep the total credit limit low and reduce your limit where possible
        2. Always pay on time and try to pay more than the minimum required
        3. Check your interest rates and aim to pay off the credit cards with a higher interest rate faster
        4. If you don’t absolutely need it, cut the credit card up and stop accumulating more debt.

It’s hard to see yourself getting ahead when you read at the bottom of your credit card statement that if you are paying off your credit card at the minimum monthly payment it might take you 60 years to pay it off!

Alternative credit card debt solutions

Debt consolidation might be a means to minimise the impact that your credit cards have on your cash flow. “Debt consolidation” means refinancing your debt onto the lowest interest rate possible – and setting up a realistic repayment plan to get it paid off! Of course, any debt consolidation strategies can only be successful if you cancel or cut up your credit cards and avoid running up any further debt. If you can commit to that, debt consolidation can potentially save you a lot of money.

There are a few ways that you can do this:

  • Consolidate your credit card debts into one personal loan
  • Transfer your debt onto a card offering low balance transfer
  • Incorporate the debts into your mortgage.

If your situation has negatively impacted your credit rating, you may find that you are not eligible for a loan to consolidate, can’t transfer to a new credit card or even re-mortgage. You may find yourself in a real struggle with debt collectors chasing you and it seems like you might have to go bankrupt.

How we can help

There are alternatives even if your situation is serious. Talk to us about the Financial Hardship obligations of your creditors, Moratoriums and restructured payment amounts and at Active Debt Specialists, we are experts at implementing the Debt Agreement* repayment option, which has no interest, stops debt collectors and your repayment is only what you can afford.

Find the right solution to help solve your credit card debt issues.

Give us a call today on 1800 085 550 for a free no- obligation confidential chat.

* Debt Agreements will affect your credit rating and conditions apply. Find out first.

 

 

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Active Debt Specialists is based in WA, successfully providing debt solutions to individuals and businesses since 1998. We help thousands of Western Australians to resolve their debt, keep their family homes, continue operating small businesses and eliminate financial stress.

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  1. Credit cards, store cards and personal loans are types of unsecured debts. Mortgages and car loans are not.