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6 steps to help you pay off your credit card

Feeling overwhelmed by credit card debt? Fear not. Getting on top of your finances and putting together a plan to get back on track is easier when broken down into simple steps.

  1. Look your credit car debt in the eye
  2. Stop adding to your debt
  3. Pay more than the minimum amount
  4. Set up a repayment plan
  5. Think about consolidating with a balance transfer
  6. Keep up the good work

1. Look your credit card debt in the eye

While it’s tempting to stick your head in the sand, start by adding up all your credit and store card debts so you know exactly what you’re dealing with. Then, get ready to get tough.

2. Stop adding to your debt

It won’t help if you keep spending up on your credit card. Try to limit your spending to the bare essentials for a while (bills, food and your rent or mortgage etc.), and pay for everything with cash or out of your transaction account rather than using your credit card. It might be worth creating or reviewing your budget to track where your money’s going and how to make it go the distance.

3. Pay more than the minimum amount

Paying the minimum repayment amount on your credit card each month is the slowest and most expensive way to pay off your debt. Aim to pay off as much as you can until you bring your balance back down. The aim should be to pay off your card in full every month so you save on interest and keep your debt under control.

4. Set up a payment plan

Creating a plan for your repayments can help you stick to your goal and pay off your debt sooner rather than later. Setting up autopay can be a good way to prioritise your credit card payment and make sure it’s getting paid down every month. Westpac also offers SmartPlan, which helps you structure repayments on purchases and balance transfers, if you need.

5. Think about consolidating with a balance transfer

Knowing how balance transfer offers work and taking advantage of them can be a smart way to save on interest and pay off your debt faster. If you have several credit card debts, this can also be a good chance to bring them together and simplify your finances.

There are many credit cards that offer low or even 0% p.a. balance transfer interest rates for a period of time – often 12 to 24 months – which could be helpful if your current card charges more interest than this.

When choosing a card, make sure you compare the annual fee and know when the offer ends, so you can plan to pay the transferred balance off before the promotional interest rate reverts back to the card’s applicable standard rate.

6. Keep up the good work

Taking control of your credit card can not only be a healthy move for your finances – it’s good for your stress levels, as well. So don’t let yourself slip back into credit card debt again once you’ve brought your card balance under control.


Things you should know

Credit criteria, fees and charges apply. Offers are not available in conjunction with any special offers that are not listed on Switches, upgrades or customers accessing employee benefits are ineligible. This information does not take into account your personal circumstances and is general in nature. It is intended as an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such.


© 2016 Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714. The Westpac Group, 275 Kent Street, Sydney, NSW 2000, AUSTRALIA.