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Don't let your credit card debt ruin your sleep

Don't let your credit card debt ruin your sleep

Is your credit card debt keeping you awake at night? If you’re having nightmares about a big black hole of debt swallowing you up then maybe it’s time to sit down and take check of your finances. The scariest part is facing your debt but once you do and start working on a plan to reduce it, you’ll be surprised how quickly your sleep improves. 

According to The Australian Securities and Investment Commission, Australians have an estimated accumulated credit card debt of over $34 billion, as of November 2013. 

But with a solid plan, commitment and discipline you can reduce your credit card debt, freeing up your mind to dream of much greener pastures.

Below are some tips on how you can win the battle and reduce your credit card debt:

Pay off the balance

When you use your credit card to pay for purchases, make sure that you pay off the entire balance each month to avoid being hit with interest. If you can’t afford to pay it all off, try and pay more than the minimum monthly repayments as this is usually calculated at two percent of the total balance owing and can take years to pay off.

Don’t add to the debt

If you can’t afford to pay off your balance within the month, don’t add to your debt by making more purchases. It sounds simple but try to think about your credit card as a debit card during the time you are paying it off. If you don’t have the funds then you can’t make the purchase. You may have to go without for a little while but it will pay off when you are no longer throwing money away on high interest.


If you are the type of person that has more than one card, think about consolidating them all with a balance transfer credit card. Even if you only have one card and you are struggling to pay off the balance, this type of card will be highly beneficial. A balance transfer credit card usually comes with a lower rate, some with zero percent for six months, so you can focus on paying off your debt without worrying about being hit with high interest rates. Just be aware that after the lower rate period is over, the interest rate will revert to another rate which is usually much higher.


Credit cards are one of those debts that are best to get out of the way as soon as possible otherwise they feel like they will never disappear. So if you are paying off a mortgage as well as a credit card, you are more than likely to be charged a higher interest rate on your card compared to your mortgage. You may be able to save in interest by focusing on paying off your credit card first. When you reduce your credit card debt you can then focus on your mortgage and put any extra money you have towards extra repayments.

Set up direct debit

We can all use a little help organising finances and paying off our debts. If you don’t trust yourself to remember important dates set up direct debit and have it automatically pay a certain amount off your credit card each month. Also, the bonus with direct debit is that you won’t miss the money as much.

No matter what level of credit card debt you have, the good news is that it is possible to reduce your credit card debt and pay it off sooner. Compare credit cards online at RateCity to find one that suits your spending needs.

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