In the lead-up to the Christmas season, it’s a very good notion to take a step back and appear at the massive picture of our credit card spending habits.
Credit cards are effectively and genuinely an entrenched part of our economic lives. We at the moment owe just shy of $ 50 billion all up, but not all of that $ 50 billion is attracting interest charges. The good news is that the amount of debt that is accruing interest correct now is at its lowest point considering that December 2009. We’ve been quite diligent lately!
That’s the good news, but despite that diligence we are nevertheless paying interest on a whopping $ 33.5 billion of credit card debt. CANSTAR calculates the average credit card interest rate at 16.95%, which implies that we are paying, on average, $ 15.5 million per day in credit card interest to our financial institutions. That is a nice income stream!
If you don’t want to be a portion of that money giveaway any far more, right here are some debt-cutting ideas:
1. Spend your “must-do” charges 1st. It’s tempting when our wages hit our bank account to have a massive evening out, followed up by some eBay surfing. But it indicates that our essential costs – things like meals, petrol and phone bills – can finish up on our credit card. So every time you get paid, cover all your need to-do charges ahead of you look at any other spending.
2. Cancel direct debts. Health club charges, subscriptions, insurances … Paying bills automatically is handy – but when they’re coming out of your credit card it’s too straightforward to not pay them back. Switch those automatic payments to a debit card rather.
3. Don’t use your credit card. Hard really like, yes, but provided you’re doing ideas 1 and 2 above, you’ll be amazed how much spending you can cut out of your day without having simple access to the plastic. It is worth a attempt!
Also make certain, if you do have an ongoing debt, that you’re not paying much more interest than you require to. Check out CANSTAR’s credit card comparison to see what’s on offer.
Three ideas for cutting debt?
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