When your credit card debt sends you running for cover

For many, credit cards are a simple way to fund your ideal lifestyle. Whether this comes in the form of new technology, luxurious getaways or that shoe addiction you can’t quite admit to yet, your credit card acts as your golden gateway, right? While this might be a great solution for the short term, your credit card shortcut also holds the potential to end you up in hot water, particularly in terms of managing the outstanding debt it almost always generates. 

So, what should you do when your credit card debt sends you running for cover? Here are some options worth considering…

Stop the spend!

The only way the credit card debt exists or grows is if you fuel it! First things first, give that credit card the flick. Now, we here at Pekada are privy to the fact that making this a reality is usually not as easy as it sounds. That’s where we come in handy! The team at Pekada can help you assess your current financial situation so that you don’t have to rely on a credit card to fund those purchases you just had to have! Rather, through tailored advice and expert insights, you can be well on your way to both kicking your credit card debt in the butt and ridding it from your wallet completely!

Get rewarded 

That being said, if you just can’t part with your beloved golden gateway, at least ensure you are being rewarded for your spend! Ensure you do your research to find out which credit cards will allow you to accumulate interest, rewards, or frequent flyer points. When used correctly, there are many perks that can come from using particular credit cards so taking the time to unpack these options with your financial adviser will not go unnoticed, and your bank account will thank you for it!

Limit yourself 

While you’re busy being rewarded, it’s time to start paying off any outstanding debt. In order to make this a realistic and achievable goal, we recommend limiting yourself to just one card at a time. Give yourself the time you need to pay off your debt in a realistic timeframe, so that you can still enjoy the lifestyle you’ve worked so hard to achieve! And as an added bonus, paying off one credit card at a time will also allow you to chip away at the annual fees your cards generate, allowing your to gradually minimise these extra costs.

Don’t forget to budget!

Budgeting is one of the most effective ways to restore equilibrium in your accounts. With a budget, you will not only achieve greater oversight of your spending, but you’ll also be able to focus on reducing your expenses according to your lifestyle. That way, you can work towards paying off your credit card debt while still living the life you want and deserve…perhaps with another pair of shoes?

As always, if you have any questions please don’t hesitate to contact me at pete@pekada.com.au.

Wealth Collective trading as Pekada (ABN 95 624 612 684), corporate authorised representative (CAR), number 1263725, is authorised to provide financial services on behalf of Communitas Wealth Pty Ltd.

The information provided on this website is general in nature and does not constitute advice. You need to consider with your financial situation and your particular needs prior to making any strategy or products decision. Pekada will endeavour to update the website as needed. However, information can change without notice and Pekada does not guarantee the accuracy of information on the website, including information provided by third parties, at any particular time Unless otherwise specified, copyright or information provided on this website is owned by Communitas. You may not alter or modify this information in any way, including the removal of this copyright notice.