Fantastic Plastic -or is it?
Whilst the government is taking action to reduce single use plastic bags perhaps now is the time for us to look at reducing our own plastic issue.
Governments are focusing on saving the environment by legislating for all retailers to eliminate single use plastic shopping bags however the plastic that’s really causing Australians the most harm sits in their wallet, loaded and ready for action.
Yes, that dreaded credit card of yours and the debt you have accumulated is the real plastic issue that needs your focus. Australians owe a total of $45 billion in credit card debt, and the debt continues to climb. Credit card debt can take a massive toll on your stress levels, not to mention the years and sacrifices required to pay it off.
So, if your credit card and the associated debt and fees are causing you to worry it’s time to take action.
Use these 5 tips to make your credit card debt more manageable:
- Budget and create an emergency fund Unexpected major expenses are often the trigger that creates excessive credit card debt in the first place. With no savings in place unforeseen expenses such as medical, car and household appliance breakdowns end up being charged to credit cards. By budgeting and placing aside just $100 a week you’ll be on your way to creating a pool of money you can dip into when an emergency arises.
- Only buy what you can afford Learn to live within your means. Putting aside a medical emergency, if you can’t afford to pay for what you are about to purchase on plastic don’t buy it. In other words, if you know you won’t have the cash to payback your credit card for any item you purchase within the 30 – 55 days (typical credit card interest free periods) you simply cannot afford to charge it to plastic
- Never miss credit card payments and always pay off your plastic each month –Missing your credit card payments are a sure way to set yourself up for a downward debt spiral. Once you miss a payment, you’ll now owe two payments plus pay the late fee. It becomes a nightmare and extremely tough to catch up. Even worse, you could find yourself turning to your credit cards to make ends meet creating a never-ending cycle of debt with no escape.
- Avoid cash advances With interest payable from the moment you access it cash advances are one of the worst ways to use your credit card and a sure sign that you are in financial trouble. Outside of an absolute life or death emergency only ever withdraw cash from your own bank account.
- Cut down on the number of credit cards you hold or better still put your plastic on ice The more plastic cards you have in your wallet the more chances there are for you to get into credit card debt. Revise your wallet and cancel all excess credit cards and stop the temptation of spending on items that you simply cannot afford to pay out by the end of the month. That being said f you don’t feel comfortable with cancelling your cards simply put them into a plastic container, fill it with water and place it in the freezer. Then down the track whilst running hot water over the ice block for your next spending spree at least you’ll have some time to reflect and rethink the debt you are about to inflict on yourself.
Credit card debt can be stressful and you should never feel like you are on your own. Remember that a problem shared is a problem halved. If you need help or would like to have a chat about your credit card debt and the options available to you please give us a call.