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Pay off your credit card

Simple ways to keep on top of your credit card

Page reading time: 2 minutes

Owing money on your credit card can sometimes be stressful. Here's how to pay it off faster, save money and reduce your money worries.

Pay on time

Check your credit card statement for the due date and make sure you pay on or before that date. By doing this, you'll avoid paying extra interest or late fees and also help keep your credit score healthy.

An easy way to pay is by direct debit or automatic transfer from your bank account each month. Set it for the day after your pay goes in, so you have enough money to cover it.

You can also set up a reminder to pay in your calendar.

Pay as much as you can each month

If you can make higher repayments each month, you will pay off the debt faster and save money.

If you only pay the minimum, you'll pay a lot of interest and it will take years to pay off your debt in full.

If you're finding it hard to pay the minimum amount, contact your bank or credit provider straight away or talk to a free financial counsellor. Taking action early stops a small money problem from getting bigger.

Cut back on your credit cards

If you have multiple credit cards, plan to reduce the number you have.

Try setting yourself a goal to pay off one card at a time. Start with either of these:

Whichever option you choose:

Reduce your credit limit

To avoid the temptation to overspend on your card, ask your credit provider to reduce your credit limit. You can do this online, by phone or by visiting a branch. In most cases, it takes between one and two business days.

If you need to increase your limit to buy something special, aim to pay it off quickly. Then reduce your limit again to a manageable amount.

Get a better deal

See choosing a credit card for tips about how to get the best credit card deal for your situation.

Consider the pros and cons before getting a credit card balance transfer with a lower (or zero) interest rate.

Keep track of your spending

Take charge of what you owe by keeping track of money coming in and going out. If you know what you're spending, it's easier to keep up with bills and credit card payments. You can track your spending in a few different ways.

Woman looking up and smiling

Savannah's smart choice

Savannah owes nearly $10,000 in total on her three credit cards. The average interest rate on the three cards is 20%. The minimum monthly repayment for the cards is about $200.

Savannah works out that if she only makes the minimum repayments each month:

  • It would take 61 years to pay off the three cards.
  • She would pay over $42,000 in interest.

Instead, she decides to pay $300 a month. This means:

  • It will take about four years to pay off the three cards.
  • She will save almost $38,000 in interest.