Paying Your Way Out of Debt

Best Balance Transfer Card

The ANZ Balance Visa is a great card to transfer your balance onto and pay off your credit card debt. With a unique rewards program which rewards you with 1 rewards point for every dollar you repay off your balance you will be able to keep up with your repayments a lot easier

• $79 annual fee
• 14.24% p.a. on purchases
• 0% p.a. for 6 months on balance transfers
• Cash Advance Rate of 21.49%
• Redeem your rewards points with some of Australia’s leading retailers

Click here to read the ANZ Balance Visa terms and conditions

Many people simply accept debt as a way of life thinking there’s no way it can be paid off. But, numerous people have successfully made their way out of thousands upon thousands of dollars in debt.

You might think you can never pay off your debt, but you’ll never know until you look at the numbers.

Why You Need a Get-Out-of-Debt Plan

You can’t get out of debt without first having a plan. It’s like going on a road trip without having a map.

You’ll know where you want to go, but you won’t have a clue how to get there. Making a get out of debt plan gives you the guidance you need to get out of debt.

A good get-out-of-debt plan has three parts – what you owe, how much you can pay, and the timing of your payments. In the first section “What You Owe,” you should list your creditors and lenders, the balance on your credit cards and loans, the interest rate, and the minimum payment. Add your balances and minimum payment to figure out the total amount you owe and what you spend each month on debt.

In the next section, “How Much Can You Pay,” put the amount you can pay above your minimum payments. For example, if you have $300 left after meeting all your financial obligations (including minimum debt payments), you may decide to spend an extra $200 on debt each month.

The final section of your get-out-of-debt plan should detail your debt repayment plan, listing your debts in the order of repayment. To save money on interest charges, you might decide to pay your debts beginning with the highest interest rate first.

Or, if you want to make quicker progress paying off accounts, you might choose to pay debts starting with the smallest balance.

Ultimately, you should pay off your debts in the order that makes the most sense for you. Whatever method keeps you motivated and on track is the best for you.

Using a Debt Repayment Calculator

As you can tell, a lot of work goes into putting together a debt repayment plan. You can do the work manually, or you can use a Credit Card Repayment Calculator. We offer one free to use here. The calculator lets you enter all your creditor information, payment amount, and payment strategy (e.g. highest interest rate first) and the calculator will generate a payoff schedule for you based on what you’ve entered.

The repayment calculator generates extra information about your repayment strategy like the total amount of interest you’ll pay on each account and the amount of time it takes to completely repay each account. Finally, you can save your repayment plan by downloading to a spreadsheet.

That way, you can continue accessing your debt repayment plan as you make your way out of debt for good.

• Comparison of Top 10 Credit Card Offers

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