4 tips to handle credit card debt

four credit card tips. hands holding up credit cards.

No sugarcoating here - falling into credit card debt is scary. But it happens to the best of us. 

It’s easy to think there’s no way out once you tumble into debt. Thankfully, that doesn’t have to be the case. 

Below are some basic tips to get you started on your credit card debt-free journey.

1. Stop using the credit card

The first step to controlling your credit card debt is to remove the physical cards from your wallet. End that temptation! It's best to keep them out of your sight, and some people have even resorted to putting them in the freezer to help with this (results may vary). By making it more difficult to access, you’ll be less inclined to reach out for it.

Instead, consider using cash or your everyday account for purchases, so you don’t accidentally spend any more money you don’t have.

2. Figure out a payment plan

Next, you want to create a repayment plan to help you tackle your debt. 

Setting aside a certain amount of money from each paycheck to pay off your credit card debt is essential. Consider paying more than the minimum amount when choosing how much to set aside, because you could risk paying a lot more interest by paying only small amounts. 

Pro tip: Automating your payments is a great way to ensure your debts are paid on time. Plus, it helps avoid racking up extra costs in late fees.

3. Consolidate your debt

If you have multiple credit card balances, it might be good to consolidate them into one easy-to-handle form of debt. You can do this by using a consolidation loan or a balance transfer credit card offer. 

The interest rates of consolidation loans and balance transfer credit cards tend to be lower than your typical credit card. Notably, some balance transfer cards come with an introductory 0% interest rate which could help you pay your debt faster.

4. Ask for help

There’s no shame in seeking help. If you’re in a situation where you’re struggling to get your debt under control, it might be good to reach out to your credit card provider for some debt relief options.

In some cases, it's possible to reach a repayment agreement with your provider and they may be able to:

  • Stop charging you interest
  • Change your repayment amount
  • Give you a few month's break from making repayments
  • Waive your debt if you’re in extreme hardship.

The Australian Competition and Consumer Commission has a free helpline available where you can receive confidential advice from a professional financial counsellor.

What if I want to keep my credit card?

If you’re not quite ready to swear off credit cards, consider finding a card with a lower interest rate. Head over to our credit card switch and save calculator to find a new card that will suit you better.

Alternatively, use the table below to compare to find a balance transfer credit card that might suit you.

Credit card comparisons on Mozo - last updated 24 April 2024

Search promoted credit cards below or do a full Mozo database search. Advertiser disclosure
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^See information about the Mozo Experts Choice Credit Card Awards

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