How Experts Can Save You $100 a Month on Credit Card Debt

Expert Tips from David Boyd on Reducing Credit Card Debt

If you’re feeling the pinch of credit card debt, you’re not alone. With the cost of living on the rise, many of us are looking for ways to ease the financial burden.

According to a report in News.com.au, credit cards are “costing Australians $8.8m a day in interest charges.”

That’s a huge amount of money and is understandably not beneficial for the typical Aussie’s personal finances and future prospects.

To help you do something about this, we’ve tapped into the expertise of David Boyd, Co-founder of the credit card comparison website Credit Card Compare and the popular cashback website Kickback, for his tips on how to save a cool $100 a month on credit card interest.

1. Take Stock of Your Situation

Before you can do anything, it’s important to understand your current position.

“The first step to tackling credit card debt is to know exactly where you stand,” Boyd says. “List all your credit cards, their balances, interest rates, and minimum payments. Work out how much debt you have and what it’s costing you each month to repay.”

Action item: Gather your credit card statements and create a simple spreadsheet to track your debts.

2. Consider a Balance Transfer

“If you’re paying high interest on multiple cards, a balance transfer to a card with a 0% introductory rate could be a game-changer.”

Many Australian banks offer deals with 0% interest on balance transfers for 24 months or longer.

By consolidating your debts and avoiding interest charges, you could save well over $100 a month, depending on your current balances and rates.

“Note that you can balance transfer more than one card, which can really simplify your finances while saving interest.”

Action item: Compare the latest balance transfer deals that you’re eligible for.

3. Prioritise High-Interest Debts

“Focus on paying off the card with the highest interest rate first,” says Boyd. “This approach, known as the avalanche method, can save you a significant amount in interest over time.”

By paying off your highest-interest card first while making minimum repayments on your other cards, you could potentially save hundreds or even thousands in interest over the life of your debt.

If you have a lot of credit card debt and decide to do a balance transfer, you might not have enough credit limit on the new card to facilitate all your debt. If so, you can focus on paying off the old card first since it’s probably going to be the one with the higher interest rate.

Action item: List out what interest rate each card charges.

4. Negotiate with Your Bank

“Don’t be shy about picking up the phone and asking your bank for a better deal,” Boyd recommends. “They may be willing to lower your interest rate to keep your business.”

Even a 2-3% reduction in your interest rate could save you a significant amount per month on a substantial balance.

Action item: Call your bank. You’ll never know if you don’t ask!

5. Cut Back on Card Usage

“While you’re paying down debt, try to avoid new charges. Use cash or a debit card for daily expenses to avoid digging a deeper hole,” says Boyd.

Consider setting up automatic payments for regular bills to avoid late fees, and try to pay for everything else with cash.

Action item: Put your credit card away.

6. Explore Money-Saving Apps

In the digital age, there are plenty of apps designed to help Aussies save money.

“From finding the best petrol prices to comparing grocery deals, there are lots of ways to free up cash to put towards your credit card debt and pay less interest.”

Action item: Sign up for a cashback website like Kickback, look for sign up bonus cash offers, use websites like OzBargain for new deals.

7. Consider a Side Hustle

Boyd suggests thinking outside the box: “The gig economy offers numerous opportunities for Aussies to earn extra cash. Whether it’s driving for a ride-share service, freelancing, or selling items online, a side hustle can provide the extra funds needed to tackle your debt faster.”

Even a few hours a week could generate the $100 (or more) you need to make a dent in your credit card balance.

Action item: Think about what you can do on the side to earn some extra money you can throw towards debt.

Wrapping Up

The key to managing credit card debt is consistency and commitment.

“Regular overpayments can make a big difference over time,” says Boyd. “By taking action and staying focused on your goal, you can absolutely cut your credit card debt noticeably.”

For more credit card tips and the latest credit card offers, visit www.creditcardcompare.com.au.