Controlling your credit card debt

Balance transfers on credit cards are great if you manage to pay the balance before the introductory rate expires. Paul Clitheroe has some advice if you find yourself struggling to clear your balance.

Q. Tony
I transferred the balance from one credit card to another to take advantage of a better rate, but this rate has now finished and I haven’t managed to clear the balance. I applied for another card with a balance transfer offer but was refused. I can make minimum payments on my current card but now fear I’ll never be free of this debt – what can I do?

A. Provided by Paul Cliteroe
It was a good plan to go with a balance transfer to a low interest card, but I am afraid to say that the time has come to take serious action if you want to clear that debt. The only long-term solution is to spend less than you earn, so I suggest you go to the MoneySmart website run by the regulator, ASIC and use the budget planner. 

You need to know where your money is going. If you are spending more than you are earning, you need to take decisive action to cut spending, sell something, or take a weekend part-time job.

I know these are not pleasant options, but you have to take control and make a choice to live with debt, which is a really bad idea, or take a strong control of your cash flow.

Paul Clitheroe is the author of Free yourself from debt, published by Penguin Australia RRP $19.99. Also available as an eBook which can be purchased from the Penguin Australia website