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A guide to paying off your credit card and managing debt in three easy steps.

Friday, 11 January 2019

Christmas is an exciting time of year, but once the festivities are over and the tinsel packed away, you can find yourself in a predicament of trying to manage your credit card debt. Here’s a simple 3-step process to getting past any Christmas spending hangover and back in control of your credit card:

  1. Create a budget
  2. Put the card away
  3. Limit the amount of cards

1. Create a budget

The first step to managing your credit card wisely is setting a budget. Create a budget spreadsheet (you can find many on the internet to get you started) and detail all your income and expenses. Include your mandatory expenses (i.e. rent, bills), as well as the nice-to-haves (i.e. new clothes, dinners out or Netflix).

Use the budget spreadsheet to determine how much you can put towards your credit card debt. Consider if is there are any current expenses you could cut out while you pay off your credit card, to free up extra cash and pay off the card sooner.

Try to pay off more than the ‘minimum amount’ specified in your credit card statement. This way you could avoid higher interest charges, plus the sooner you pay off your debt, the better!

2. Put the card away

Once you have a budget, try to put the card away. Impulse buying becomes more difficult if your credit card is not in your wallet.

If you’re often tempted by online shopping, you could also consider disconnecting your credit card from PayPal or other payment platforms.

If putting the card away isn’t enough to control your spending, your credit card provider may be happy to put a temporary block on your card until you’re happy to use it again.

3. Limit the amount of cards

If you have more than one credit card, consider whether you need all of them. Accumulating debt can often become difficult to manage across multiple cards. Consider consolidating your debts by transferring outstanding balances to a single card and cancelling unnecessary credit card accounts to make your debt simpler to manage. 

Occasionally some providers also offer an introductory interest rate on balance transfers. This can be a cost-effective option for consolidating your debt onto one card, but remember the rates and fees on these products often increase sharply once the introductory period expires. Be sure to do your research beforehand to avoid paying more than you expected or budgeted for! 

If you do have more than one credit card debt from your Christmas spending spree and are unsure where to start, why not start by paying off the one with highest interest rate? This is particularly helpful if it also has the highest balance.

While you are reviewing your credit cards

It’s important to ensure you have a credit card that suits your needs. Consider a card which has a low rate and a low annual fee such as the Value+ Credit Card. It’s also helpful to consider which features are most important to you in a credit card, whether you need a low interest rate, rewards program, low annual fees or links to other accounts.


This article is intended to provide general information of an educational nature only. It does not have regard to your objectives, financial situation or needs and must not be relied upon as financial product advice. Before you act on this information, you should consider whether it is appropriate for your circumstances. Information in this article is current as at the date of publication. Applications subject to credit approval and fees and charges are payable. Terms and conditions apply and are available on request.
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A guide to managing debt in three easy steps.

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