Make your repayments on time
Failing to pay at least the minimum balance by the due date can result in a hefty late payment fee of up to $40 — and that fee may be doubled if you go over your credit limit, and incur an overlimit fee as well! “Programming a reminder in your diary or phone is a good idea if you’re prone to forgetting when payments are due,” suggests a spokesperson for ANZ bank.
Always pay more than the minimum amount due
Even if you have a $500 credit carddebt, you may never get out of debt if you only repay the monthly minimum, reports advocacy group Choice, which provides unbiased information and advice for Australian consumers. Set up a direct debit from your bank account to pay a little more than the minimum due on your credit card bill each month so you can make good progress towards eliminating your debt.
Pay your most expensive credit card debts first
This is the only instance in which you should ignore tip #4! It’s one of the tricks of the trade that Fox Symes suggests to their clients, as it helps you put your hard-earned cash to best use.
“It makes sense to pay off the debt with the highest interest rates quicker,” recommends Fox Symes. Therefore, if you have four credit card debts to repay, isolate the card with the highest interest rate and make that your priority. On your other three cards pay the minimum, but on the high-interest card pay as much as you can afford each month. Once the high-rate card is fully repaid, concentrate on paying off the next highest-credit while still paying the minimum due on your other two cards. Eventually, all of your credit card debts will be repaid: see tip #1 to avoid having to start back at the beginning again!
More about managing your credit card debt
Watch and listen as I call my credit card company and ask for a lower interest rate.
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