How to Manage your Credit Card Debt & Balance Transfers

Being clear about what you can afford to borrow and repay each month and understanding how you intend to use a credit card will enable you to get the most out of one. If this is your first credit card, or even if you already have one, ask yourself:

Will you be able to......?	Use our credit card repayment calculator to...
clear the balance in full every month	confirm what you could be repaying each month for different credit limits and interest rates.
only make minimum monthly repayments	find out how long it might take you to repay different credit limits.
make one off lump sum payments in addition to regular monthly payments	see how much interest you could save by making extra lump sum payments.

If you know you can repay the balance in full every month you will be in a position to take advantage of a credit card that may have a higher interest rate but more rewards and benefits. Likewise, if your income enables you to make additional one off lump sum payments occasionally, then you may be able to take advantage of a higher credit limit. If you're only intending to make minimum monthly repayments consider getting a card with a low to medium interest rate and smaller credit limit, to keep the debt manageable.

Most credit cards work in the same way, i.e. you can make purchases, cash withdrawals and transfer debt balances onto them. However, credit card companies usually offer credit cards by types that reflect the way they will be used, for example, if you want to transfer existing credit card balances you would be offered a 'balance transfer' credit card. This is why it is important to know how you intend to use your credit card, think about whether you need it to:

• transfer debt from other credit cards or loans,
• assist with day to day living expenses and small shopping purchases,
• cover one off large purchases or expenses such as a wedding or a holiday or a home improvement,
• pay for travel and purchases overseas,
• provide cover in an emergency, for example unexpected vehicle repairs,
• or provide a combination of some or all of the above.

 

Download the Credit Cards PDF Guide here - see our other free PDF guides here

Guide Contents

Thinking about credit cards?
How to manage credit card transfers and debt
Compare Credit Cards and find the right card for you
Understanding credit card charges
Shopping around for the best credit card deals
What to expect when you apply for a credit card
Credit card FAQ - eg. What Are 0% and Interest Free Credit Cards
Where can I go to get more credit card help?

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