It may be no surprise to learn that according to a recent Dun & Bradstreet survey 39 per cent of all working Australians have very little cash saved... and for most, why would we?
One of the main reasons is that for some time now many of us pay our way through daily life with our credit cards.
However the current economic climate has prompted many Australians to reassess their financial stability, which means rethinking the credit card.
Essentially there’s the real danger that you end up spending money that you don’t have, and if you are unable to produce the minimum payments outlined by your lender each month then your debt – and the interest you’re charged – continues to climb.
The following tips coupled with a little willpower will help you rein in the plastic and reduce your debt.
1. Consolidate. By channelling all of your loans into one you can make a dramatic reduction to the interest you’re charged while making the debt easier to manage.
2. Prioritise. Pay off the credit card that has the highest interest rate first then work your way down to the card with the lowest rate.
3. Negotiate with your creditor. Don’t hide from your card provider if you’re in trouble – the chances are they will work with you to help reduce your debt and even your interest rate.
4. Cut your outgoings. Avoid extravagances such as expensive dinners and boozy nights out – a DVD and a takeaway can be a cheaper alternative when trying to save a buck.
5. Sell assets. Painful though it may be, in dire circumstances it may be worth liquidating investments such as stocks and shares, or items such as cars and boats, to pay off spiralling debts.
6. Swap cash for card. The most effective way to ensure you’re reducing your debt is to remove the perpetrator. Cut the card and only purchase what you can afford.