Why you keep incurring credit card interest

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There is barely a store online, or off, that doesn’t accept credit cards these days, so it’s become common practice to slap everything onto our credit card and pay it off at a later date. While it’s very convenient you have to understand how your credit card fees and interest charges are applied in order to stay out of debt.

But despite our best efforts Australian’s are still paying hefty credit card fees and charges. Think about what causes you to be constantly bogged down with credit card fees and interest. Almost every card offers a 55 day interest free period where no additional costs are charged for your purchases, so why are you still stuck with high interest?


Are your credit card purchases so regular that you can’t keep track of them? If you do put everything onto your credit card it can be hard to time your payments as you won’t always know when to balance your account.

A good tip here is to add up the amount of purchases you make in the month and try to settle it on a specific date every month, for instance the last Friday of the month. That way you can get an idea of your spending habits, and never run the risk of paying high interest.


If quantity over quality is your problem, then the logical solution is to simply cut down on unnecessary expenses. Internet shopping can be as addictive as online gambling so know your limitations and avoid shops or online sales if you know you will be tempted to spend. You will always be able to find an excuse to make a credit card purchase but the only way to pay off your debt before it landslides you into defaulting and destroys your credit record is to just do it!

Dead End

So your credit card balance is higher than you ever imagined, and you are looking at the prospect of paying high interest for months. If you think you have learned the lesson of credit spending, then a good solution may be a balance transfer credit card.

This allows you to switch your credit card debt over to a new company, which will lower your interest rate dramatically for the introductory period. But if you don’t use this reprieve effectively, you will be back to square one with a huge monthly bill again.

Note, the introductory rate will revert back to a higher rate after a certain period of time. Make sure you are aware of the revert rate and commit to paying off your debt during the intro period.

Paying with a credit card makes transactions quick and convenient, but don’t forget that it comes with the price of paying off the card too.

It’s never been a smarter time to shop around and compare the current interest rates and fees you are being charged to see if there is something better out there for you. To compare some of Australia’s lowest interest rate credit cards use the RateCity credit card comparison tool.


^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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