Understanding credit card debt

Hi all, Em here again (where do you think Andy has gone this time? He better not be spending up a storm on the credit card….unless he’s buying me a gift! Unlikely).understanding credit card debt

Today I want to explain a little bit why credit card debt can be trouble. It’s one of the most common debts a lot of us face, and it can be one of the most difficult ones to get rid of.  Have you ever thrown your hands up in despair and wondered, “what the **** am I going to do about my credit cards?!”. If this sounds familiar, then this post is for you, my friend, we’ll have you understanding credit card debt soon.

What’s wrong with a bit of credit card debt?

Credit cards can be very useful things to have. We use ours to buy all our groceries, then pay it off each month before the interest gets charged. That works well for us.

But if you use your credit card to buy things you can’t pay off, like expensive jewellery, holidays, new clothes etc, you will get charged interest, which is usually quite high, often more than 20%.

This will make your debt get bigger and bigger each month, and it can seem impossible to pay it off.

The temptation is then to take out another credit card to pay for the first one, or to buy more stuff that you want. This can become quite a nasty debt spiral.


Why can it be so easy to get a credit card then?

Well, the more interest you pay, the more the companies profit from you. So it comes down to cold, hard cash. Its a brutal world out there!

Remember: just because you can get approval for a credit card does not mean you should take the offer. I know of several people who have thought “well they wouldn’t offer it to me if they didn’t think I could afford it”. Wrong. Be careful.


Simple tips to downsize credit card debt

  • Make more than the minimum repayment each month. The more you can afford to pay, the less interest you will be charged. Don’t get fooled into thinking that because you are meeting the minimum repayment you will not be charged interest. You will. I’ve found a nice example of how even paying $10 more per month can make a massive difference for you from Investopedia.
  • Setting up an automatic payment can help you remember to pay your monthly bill.
  • Don’t let your bank or lending institution increase your credit limit! Our bank is terrible for doing this to us. It will only lead to more debt.
  • If you have more than one card, you could consider consolidating them into one, but you would need to take some financial advice first. Your bank may be able to help with this. This will save you multiple account fees and interest charges.
  • If you aren’t keen on consolidating, you could consider paying off the card which you owe least on first, shut that one down (and therefore getting rid of fees) then move onto the next one.

We think one of the best things you could also do is start creating some extra income for yourself to help yourself pay those debts off even quicker. Credit card debt can be expensive, so it’s a good idea to be proactive if you’re bogged down in credit cards. We make extra money online using Wealthy Affiliate and recommend you give this a go, too.


Happy downsizing,



image by Raymod Gilford, CC2.0, https://flic.kr/p/4AcRqL


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