6 ways to reduce your debt today

September 3, 2009

In debt up to your eyeballs? You’re not the only one. Credit card debt in Australia has reached an all time high of $42 billion, with the highest percentage of debtors being women aged between 18 and 34. Yikes!

Thankfully Mike Jarocki, Editor, Credit Card Finder, is on hand to help you get back on top without having to sell the kitchen sink and your soul.

Debt consolidation

Debt consolidation is a good idea if you own several debt accounts. Your primary goal is to keep up with your accounts and repayments and by having several debts at once the process becomes a lot harder to control.

Consolidating your debts into the one major debt might be the right solution for you right now. Instead of making several – hard to manage – payments each month, your consolidated loan will move into the one payment only. This will allow you to manage debt consolidation a lot easier.

Consider snow ball card repayments.

Have you ever heard of the snowball method? This involves paying off the minimum amount of debt on each creditors bill while paying off as much as possible on the debt with the lowest interest rate, ultimately paying that particular debt off as fast as possible and then moving on to the next debt.

This whole snowball effect will trigger itself by saving you a lot of money long-term. Just be aware that this method will attract higher interest rates. You could also do this in reverse mode by paying off the debt with the highest interest rate first. You can use a credit card payment calculator to help you see which way is better.

Automate your credit card payments

A great way to stay on top of credit card payments is to automate them. This can easily be done via direct debit from your savings or checking account. Doing this can have many benefits. You might get additional discounts or even a lower interest rate on your credit debt.

Some institutions allow you to schedule these payments weekly which will save you more interest.

Maximise payments, pay bi monthly

Another way to reduce debt is by paying your mortgage bi-monthly or even weekly if you can. This depends on your mortgage of course. If for example you have an investment property and pay interest only, then you can’t do this. Those payments are monthly only.

By making your payments your interest rate will be reduced saving you a lot of money. Speak with your lender to clarify your options.

Slow spending urges

By reducing your urges to spend money you can also avoid a lot of debt. Many things we buy are bought unnecessarily. Often we wake up the next day and wonder why in the world we bought the item anyway.
Resist temptation and try to sleep on decisions overnight if possible.

Consider a second job

If all the above credit card debt reduction and general debt reduction tips are not successful enough for you, then the last resort might be in finding a second job or more work hours. This can boost your income which in turn can be invested into your debt. Every cent saved can turn into hundreds of dollars in interest savings over the years.

About Credit Card Finder

Credit Card Finder is a free, Australian owned online service for comparing credit cards and financial products available to Australian consumers. They help consumers make the best credit card choice, and provide credit card usage and saving tips alongside the latest credit card offers. They are the number one resource for credit card news and personal finance advice in Australia.

For more info check out http://www.creditcardfinder.com.au, a free Australian owned online service aimed at helping people manage their credit cards and finances.

For more cash advice click here!

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