Many people struggle with credit card debt. In this article we discuss five tips that will help you avoid credit card debt. Read on to find out how to stay out of credit card debt.
Credit Card Debt Tips for Savvy Australians
There are currently more than 14 million credit cards in circulation in Australia, so it’s fair to say that Aussies use their credit cards a lot. With the recent economic downturn, many people are having problems with repaying their credit card debt. Here are some tips for avoiding or reducing credit card debt.
1. Don’t pay just the bare minimum
On many credit cards, the minimum repayment amount can be as low as 1.5% of the outstanding balance. If you repay the bare minimum, you are still charged interest on the outstanding balance, and those interest expenses do add up. It’s best to repay your balance in full each month, but if you’re unable to do so make sure you pay off as much as you can.
2. Don’t use the cash advance feature
Cash advances are charged at an exorbitantly high rate by most card providers. Rates are generally over 20% p.a. and in many circumstances interest accrues from the day you obtain the cash advance. Try to avoid using your credit card for cash advances and use debit cards instead. In addition to interest expenses you will generally have to pay a high fee for using the cash advance feature and the higher the amount of cash advance, the higher the fee you are charged.
3. Beware of introductory rates
Many credit card companies try to lure in new customers by offering attractive introductory rates such as very low fees and interest rates. Once the introductory period is over, these companies increase the interest rates and fees, and consumers are left dealing with higher expenses. The introductory period is usually around 6 – 12 months, and most companies hope that customers will stay on longer and bear the higher expenses. If you signed up with a credit card to take advantage of an introductory offer but are now facing high fees and interest rates, your best bet would be to find a better credit card and stop paying the excessive fees.
4.Know the interest rate being charged
Many credit cards have a little clause in fine print that allows the card company to raise interest rates without much prior warning. Cardholders can find themselves paying much higher interest charges and this causes them to rack up debt faster. If this happens to you, make sure to switch to a credit card which offers much better terms.
5. Understand the fees
Most credit card companies charge fees for various things such as foreign cash transactions, cash advances, using another bank’s ATM and so forth. Understand the types of fees your credit card provider is charging you and try to use your card in a way that does not attract too many fees.
Hopefully these tips will help you to manage your credit card better and to stay out of credit card debt.
Related posts:
- Tips To Follow And Reduce Your Credit Card Debt
- Tips to Help You Pay Off Credit Card Debt
- Most Important Thing To Know When Trying To Reduce Your Credit Card Debt
- The History of the Balance Transfer Credit cards
- The Easiest Way to Pay Off Credit Card Debt Explained
Posted on Sunday, June 27th, 2010 at 8:35 pm
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