If your New Year's resolutions included better financial habits, keep reading for some very simple tips to paying off your credit card debt (especially if your card is still recovering after the holiday season).
1. Don’t fret
You are not alone. Every day, millions of Aussies choose to put expenses on their credit card, and there is nothing wrong with that.
2. Stop spending on your credit cards
However, now is the time to stop spending on your credit cards. The easiest way to do that is to take them out of your wallet, hide them in a draw or simply leave them at home. Make them as hard to access as possible, so that you won’t be tempted.
3. Understand how much you owe
The first important task is to understand how much you owe. Does your family have one, two or three credit cards? Figure out the total you owe for all your credit cards combined and understand if you are currently in any interest free periods, and which of those periods expire first. Now would also be a good time to check your monthly minimum repayments for each card.
4. Make a payment plan
Now that you understand how much you owe, you need to create a payment plan. How much can you afford to pay each week, each fortnight or each month?
5. Make a budget for the first quarter or first half of the year
Budget, budget, budget. It’s time to write a budget for the first quarter or the first half of the year so you can see how much you’re able to commit to repayments higher than the monthly minimum. Remember the more you pay now, the sooner they will be paid off and you can put that money towards something else – like a holiday!
6. Start making payments
It’s now time to start paying off your credit cards. You have to start somewhere, and once you start, the task becomes much less daunting.
7. Make a change
Was it Christmas, travel, or general life that caused you to overspend on your credit cards? Whatever the reason, now is the time to think about how you can make some changes to your budgeting and finances to ensure it doesn’t happen again.
If you’re struggling to get your finances in check this year, the friendly staff at your local BOQ branch may be able to assist you. However, if you just need some help with your budget, check out the BOQ Budget Planner.
Use our budget planner to get a personalised look at how much you can save based on your income and expenses. Get on top of your finances today!