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Trapped with debt?

Want to know a simple way to pay off credit card debt?

Firstly, do you have a plan for paying off your credit card?

If worst came to worst and you needed to take action, would you:

  • A) get a personal loan to pay off your credit card debt?
  • B) start cutting your own hair to limit spending?
  • C) start singing and busking on the street to earn some extra cash?
  • D) all of the above?


Let’s face it, owing money sucks. Especially when the money you owe seems to magically increase from month to month.

Credit card debt, in my opinion, causes some of the most devastating negative effects on your ability to live comfortably and happily. Not only will it damage your household budget, it will also cut the legs off any aspirations you may have for the immediate future.

Now, I can’t help you with your singing skills if you do decide to go busking, but I can teach you how to pay off your credit card debt and get back on track financially.

“I haven’t reported my missing credit card to the police because whoever stole it is spending less than my wife”. – Ilie Nastase

Why you need to pay off your credit card debt, and pay it off now! 

It’s no secret that eliminating debt will allow you to spend your hard earned cash on the things you really want, rather than paying off some bank CEO’s summer holiday home.


But, you need to know that credit card debt not only affects your ability to enjoy the luxuries of life, it has a major influence on your credit score and your ability to borrow money in the future.

You might be wanting to save for a new home or a new car, but that pesky credit card debt just keeps getting in the way.

In Australia, there are a few things that will affect your credit score:

The organisation that provides you credit

Did you know, the type of organisation that provides your credit card will produces varying results for your credit scores?

For example, a credit card from a bank may provide you with a better credit score than one that was provided by a supermarket or department store.

The amount of credit cards you have

The amount of credit cards you have may work for you, or against you, depending on your average level of debt.


A low level of debt, spanning across multiple cards, may suggest that you are a favourable applicant and provide you with an ‘okay’ credit score.

But, multiple cards with moderate to high levels of debt signify that you may be in a poor financial situation resulting in a less than favourable credit score.

The amount of applications you make

Frequent applications will negatively affect your score. If you need to apply for a second or third card, make sure you wait roughly one year between applications.

Late payments


Defaults on your repayments are a major black eye to your credit score, severely limiting your potential to gain credit or apply for a loan in the future.

Debt amount

The amount of debt, not to be confused with the amount of credit you have, is another factor that will count towards your overall credit score.

To find information regarding your credit report and credit score you can visit anyone of these sites:

All of these sites offer subscription services to keep you up to date with the state of your credit. Though, I suggest that you just take advantage of their free credit report and score offers, as this will easily provide you with everything you need to know.

Strategies for paying off your credit card

To get started on a plan for paying off your credit card, you really need to embrace these key concepts and follow the 6-Steps:Find out what your dealing with

  1. Find out what you’re dealing with
  2. Don’t look for the easy way out
  3. Payoff the card with the highest interest rate first
  4. Be aggressive with your repayments
  5. Don’t be late, automate
  6. Get in touch

 1. Find out what you’re dealing with

 Right, the first thing you need to do is to know the terrain. Learn as much as you can about your credit situation:

  • How much you owe in total
  • Your interest rates
  • Your credit score

You need to know the enemy in order to defeat it. Too many people just accept that they have debt and mindlessly allocate money to their creditors each month with out knowing if they are actually making progress.

It may be emotionally difficult to see how much you actually owe. But, this is the only way to start designing a real plan for success.

2. Don’t look for the easy way out

Ah …the easy way out, the fat burning supplement of the financial industry.

Try not to be tempted to seek out balance transfers or taking out a personal loan to pay off your credit card debt.

Balance transfers and personal loans really encourage the temptation to spend during the initial interest free period. If you are in deep debt, this will trick you into going deeper.

You need to also think that this will cost you a fair amount of time in research, communication with creditors, applications and whatnot. Why not use this time to come up with ways to earn some extra cash each week? Did someone say busking?

3. Be aggressive with your credit card repayments

When I was young, people lived from paycheck to paycheck. Today, it seems like they live from credit card payment to credit card payment. – Robert Kiyosaki

Being aggressive with your repayments doesn’t involve going to your creditor and viciously stuffing money down their pants each month.


What it does involve is finding your minimum monthly repayment and doubling it.

This strategy is aimed at decreasing the total interest you will pay and the duration of your debt. You may be tempted to get by this month paying the minimum amount so that you can afford that vegan doughnut at your local hipster café this weekend. But, paying the minimum amount only maintains that vice like squeeze your credit card company has over your financial future – exactly how they want it to be.

Take a look at these two examples to get a better idea of what you could potentially be paying (assuming an interest rate of 14%)

Total Debt, Interest Rate, Monthly Payments, Total Repayments, Total Debt Period
$4 000,14%,$81 (decreasing each month),$8 595, 19 years and 9 months
$4 000,14%,$190,$4 556,2 years


Click here to use this calculator to figure out repayments that will smash your credit card sooner.

4. Payoff the credit card with the highest interest rate first

If you have more than one credit card you need to prioritise the card with the highest interest rate.

Pay the minimum for all other cards and attack the one with the highest rate aggressively. This will help you out in the long run as you want to eliminate the card that will be costing you more over time.

Once you pay the first card the rest will feel like a walk in the park.

5. Don’t be late, automate

As I mentioned earlier, defaulting on your payments is one of the worst things you could do to affect your credit score.

The best way to avoid missing your payment each month is to set up an automated direct debit payment.

For those who know me, I’m a major fan of automating everything to do with your personal finances (we’ve got better things to do in life than worry about money).

Remember to use the strategy from the last step and make sure you are setting an amount that exceeds the monthly minimum.

6. Get in touch

As bad as the credit card company demons may be, you need to know that they want you to pay them back. If you don’t, they lose out.  

Call your credit card company to discuss any interest rate options and/or to set up some sort of payment plan.

If things are serious, get on the blower to them right away!

Remember, they want your money more than you do, so they will do anything they can to help you give it to them.

Now you know how to pay off your credit card debt it’s time to get your hands dirty and put it this knowledge in to action.

Here’s Your Challenge

(I’m going to keep you accountable)!

Righto… Here we go. Let’s make this happen.

I want you to comment below and tell me the exact date you want to have your credit card debt completely paid off. And I will hold you to it!

You can put in there how much debt you currently have, or not, it’s totally up to you.

For more information, regarding credit cards and your budget, be sure to check out Paying Off Your Credit Card Could be Killing Your Savings and Is it Good to Pay Off Credit Cards Right Away?