Deliverance from Debt: Your Credit Card Management Guide

Got debt? Take charge of credit cards once and for all with your credit card management guide.

The credit card seemed like such a great idea, didn’t it? But no one mentioned that credit and debt go hand in hand. Without proper management, your amounts owing can quickly spiral out of control.

To save you the stress, we’ve provided you six top tips for credit card debt prevention and reduction. Ignore this advice at your own risk—because the longer you are in debt, the worse off your overall credit score or credit rating will be. The good news is: you can get it under control. Fast.

Stress saving credit card tip #1 – Pay on time

The first tip is obvious for some and not so for others. Drum-roll please...
OK, here it goes... don't say you weren't warned.
Always pay your credit card debt on time! Doing this will keep your credit rating intact and if you ever wanted to apply for a loan, your chances are pretty good, provided you actually have the financial means to pay it back.

Stress saving credit card tip #2 – Pay more than the minimum

If you can, pay more than the minimum required each month. Even better, pay the whole thing off each month and then start afresh. Your primary goal should be not to get into debt in the first place.

But if on the other hand you already struggle to make repayments, then every little bit helps to reduce those hefty interest rate penalties. Even if this means you have to forgo your weekly gossip magazine, a drink after work or coffee in town, then do.

Prioritise your card repayments. If you are paying off several cards at once you should consider consolidation or else pay off the card with the highest interest rate first, and then work your way through them, one by one.

Stress saving credit card tip #3 – Avoid the tipping point

If you fall off the bandwagon and acquire too much debt, you will be in a serious financial lockdown. You won't be able to get any further loans or credit cards approved. Plus, more debt always attracts higher interest rates, which makes it even harder to pay off the primary debt—all you end up doing is paying off the interest.

Stress saving credit card tip #4 – Don’t get a store card. Just don’t.

Avoid store cards like the plague. These are little suckers! They come across as being great to make purchases in your favourite store but beware if you fail to pay your bill. You will get hit with ridiculous amounts of interest.
Also, those offers of pay nothing until 2012 etc. are traps to suck you into financial oblivion. Do not succumb to them. If you can't afford it, don't buy it!

Stress saving credit card tip #5 – Keep your credit payable, plan for the rainy day

Focus on your debt to income ratio. Your loan or credit should be in direct relation to what you actually earn in income. If the ratio is too high, you are asking for trouble should you ever lose your job or your capacity to work is reduced.

Stress saving credit card tip #6 – Get the scissors out!

Memorise this formula: debt = bad. If you want to break the evil cycle of debt and credit, the best present you can give yourself is a scissors. Cut up ALL your credit cards, store cards, etc, and live frugally until you have paid off all your outstanding debts.

Follow these six simple tips and you can get yourself out of debt.Change your life today and feel free from financial pressure.

There are loads more ways to better manage your credit cards—below are some links to articles with more tips and tricks you might have not heard of:

View our credit card guide for more information

• How to use a Chip Credit Card
  

  Are you confused by the new chip credit cards? Read our brief guide to understand how to use them when paying for your purchases at the register or in an EFTPOS machine.



• The Positives and Negatives of Paying Your Bills Automatically on Your Credit Card
  

  Paying bills automatically on your credit card can be both a good idea and a bad idea, depending on your circumstances. While there are definite benefits to paying your credit card this way, there are also some pitfalls of which you should be aware.



• How to Pay Your Credit Card
  

  Debt is now considered an ugly four letter word. It can reduce the most capable people to the depths of despair. There is hope, however, and paying down your debt can be managed with the right information.



• How To Close And Cancel Your Credit Card Account
  

  Staying on top of your finances can take some effort. It is not always easy to know what to do and when to do it. Using credit cards is convenient and can be a useful tool but when you are finished with them, it is important to know how to go about closing the account.



• How Long Should I Keep My Credit Card Statements?
  

  A credit card statement should be kept for as long as you need it in reference to how you have used the card. Personal card statements probably do not need to be kept as long as those used for business expenses. Regardless of how long you use the card it is very important to shred and dispose of them properly because old statements are primary targets for identity thieves.



• The Best Practices In Owning And Using A Credit Card
  

  Millions of Australians use credit cards every day and while some use them responsibly others simply do not understand the best practices to follow with the card. Take a look at this article to find out how to treat a card responsibly and with respect to get the most out of it.



• How to avoid spending more than you can afford to on your credit cards
  

  Having a credit card can be very convenient and useful for making purchases on the fly, however if put in the wrong hands it can be like leaving a monkey with a gun! Here are some useful tips to help you avoid overspending on your credit cards.



• Common Credit Card Errors That You Can Easily Avoid
  

  The cost of credit card errors is high for Australians. Many people are paying too much in interest, fees, and dealing with fraud simply because they did not take the time to figure out how to avoid these charges. There are a few mistakes that credit card owners make that you should know about and avoid at all costs.



• Dealing with your Credit Card after Losing your Job
  

  Many consumers are in the situation of having a credit card and losing their job. They don’t know what to do with their high interest debt. Here are some suggestions.



• Do It Right: Optimize Your Credit Card By Using It The Right Way
  

  Debit cards have becoming increasingly more popular over recent years however when you compare the benefits of debit cards v.s credit cards, credit cards are still the clear winners. This article reveals where and how you should use your credit card in order to maximise your benefits.



• How To Learn The Credit Card Basics
  

  Credit cards are everywhere. In fact, most people can’t imagine a world without credit. However, using credit wisely is important and will separate you from those who use the privilege indiscriminately.



• Opt Out Of Credit Card Offers To Reduce Junk Mail
  

  In Australia, there are unfortunately only a few ways to opt out of receiving credit card offers in the mail. Read this article to read about the options available here, and in the US to opt-out of receiving junk mail to your home.



• How to Pay Your Credit Card Bill on Time Each Month
  

  If you struggle to pay your credit card bill on time each month, you could be paying far more than you think in interest charges and penalty fees. This can make it much harder to reduce your credit card debt and cost you far more money than you should be paying.



• Don’t Let Your Credit Card Control You
  

  Credit cards have become commonplace. There was a time that cash and cheques were commonplace but these out-of-date methods of payment have been replaced with credit cards. However, with the abundance of credit comes the possibility of misuse.



• Credit Card Info For Dummies, Beginners and First-time Credit Card Owners
  

  If you don’t know the first thing about credit cards and need some basic credit card info then this article is for you. Credit cards offer a brand new world of financial credit for people that qualify, and must be used properly to avoid acquiring debt.



• How to Deal with Financial Stress
  

  If you are suffering financial stress, there are some simple actions you can take to relieve yourself of your financial situation.



• How to Use Your Credit Carefully
  

  Once you have attained a credit card, you are presented with a financial responsibility to ensure that you use it carefully and in a sensible way that isn’t going to get you in to credit card debt that you can’t manage.



• What To Do If You Can’t Afford To Make A Credit Card Repayment
  

  If you are struggling to make your monthly credit card repayments each month, you should strongly consider switching credit cards to a lower interest credit card that fits within your budget.



• 7 Reasons You Hate Credit Cards
  

  If you hate credit cards then there may be a good reason why you have this feeling. Take a look at this article to find out more about credit cards and why we tend to hate them.
  If you have found that you hate credit cards lately, and don’t understand why this could be happening, then [...]



• How To Safely Use Your Credit Card As Cashflow Between Pay Cheques
  

  Many people use their credit card to help them with cashflow between paychecks, but if you do not use proper credit card management then you can end up in trouble. Take a look at this article to find out how you can use your credit card as a backup, and not have to worry about [...]





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Editor's Choice: Our Top Credit Cards




Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
HSBC Credit Card	Editor's Choice: 0% for 6 months Balance Transfer & No Annual Fee Featuring a $0 annual fee for life, and 0% p.a. balance transfer for 6 months, the HSBC Credit Card was voted the Best Transactor Credit Card for 2010.	16.99%	20.75%	0% for 6 months	$0	55
Suncorp Clear Options Standard Visa Card	A great 12 month balance transfer offer, combined with a low annual fee and a good interest rate on purchases.	12.24%	17.99%	1.9% for 12 months	$39	0