Career & Money

How To Finally Get On Top Of Credit Card Debt If You’re An Amateur Saver

By Sophie Oddo
2nd Jul 2020

A man in sunglasses and a woman in a cap smiling as they walk arm in arm down a path

At Urban List, we are all about living your best life, so we of all people know that sometimes, living this life can send you on a slippery slope straight to the fiery pits of credit card debt.

Not only is credit card debt stressful, it seriously hinders your ability to smash your savings goals and get on with the fun part of life. We want to help you live your best life now and in the future, so we’ve teamed up with Up to serve up six easy steps to getting on top of your credit card debt and achieving financial wellbeing. 

Be Honest With Yourself And Your Situation

We get it, when debt seems unmanageable, sticking your head in the sand and pretending it doesn’t exist seems like a great option. Unfortunately, this won’t make it disappear and not tackling the issue head-on will likely only make matters worse. It’s confronting, but if you’re serious about getting into the green, it’s time to start by adding up all your debt, so you know exactly what kind of beast you’re dealing with. Then, it’s time to get tough.

Work Out Where Your Money Is Going

Put simply, if you have credit card debt, there’s more going out than there is coming in. In most cases, people are aware of what is going into their account, they know how much they get paid and when. So with that being said, the million-dollar question is, do you have a proper understanding of what is going out? Have a look at the categories in which you're spending and find insights into where the damage is being done. Things like rent, groceries and travel are an essential part of living, so what’s important to gain insight on is all of the non-essential spending that’s stopping you from paying off your debt as quickly as you can. If categories like ‘hair and beauty’, ‘restaurants and cafes’ and ‘clothing and accessories’ are taking up a huge chunk of your metaphorical wages pie, it’s time to reassess your spending habits.

Start Living Within Your Means

Let’s get this straight, if you’re serious about ridding yourself of this debt, it needs to become your number one priority. Yes, that means before the Bali trip, before that new pair of sneakers and before that boujee dinner at the new restaurant that just opened up. Chances are, if you’ve been living beyond your means, you’re not going to know where your financial boundaries lie. In order to work out what your means are, you’ll need to accurately analyse all of your essential outgoings and expenses (don’t forget the things like road tolls, Netflix subscriptions and car insurance) and what you have left disposable to you, is what you need to learn to work with. If you struggle with staying on top of bills, use an app like Up so you can learn your regular charges and predict when they occur. Or if you struggle to save and plan for big expenses like rent and car registration, set up savers to separate those funds from your everyday spending and keep you prepared. 

Make Your Debt As Manageable As Possible

While paying off the actual debt is the hardest part, there are other simple steps to take to make the process more manageable. Firstly, if you have debt and interest fees racking up over multiple cards, ensure to roll them all into one place using a balance transfer to help save on interest and simplify your finances. Many credit cards offer extremely low or even 0% interest on balances transfer interest rates for often up to 12 or 24 months, which can help you to pay off the debt faster. Secondly, when you’ve started to pay off your debts, ensure to decrease the limit on your card so you’re not tempted to spend or fall into a false sense of security. Finally, aim to pay off as much as you can each month to bring the balance down. Only paying the minimum amount is both a slow and expensive way to pay off debt, so you should aim to delegate most of your disposable income to repay the debt.

Every Cent Counts 

Chances are that if you’ve racked up significant credit card debt, saving isn’t going to feel like an easy feat. But, the good news is that despite the debt, you can still turn your cents into centuries using Round Ups. This tool is a simple and easy way to save without even thinking about it and without feeling too much financial strain while simultaneously paying off your debt. Round Ups allow you to round up every purchase to the nearest dollar as well as even adding a ‘boost’ of up to $10. While you’re probably not in the market to be splurging on anything significant, you can delegate these Round Ups into your ‘rent’ saver and feel less pressure when it comes to saving and paying for life’s essential expenses.

Stay On Track And Reward Yourself

Sometimes it can be easy to transfer a few good repayments and make serious ground, but before long we feel burnt out and fall off the bandwagon. It’s important to maintain a consistent and manageable approach so you can avoid feeling rundown and stay in it for the long haul. If you’re making a good dent into your credit card debt and you’re seeing a real difference on your balance, make sure to acknowledge your hard work and efforts with some TLC for yourself. Whether it’s a meal out with friends or a fresh manicure, it’s important to still enjoy life and celebrate the little milestones along the way.

Ready to smash your credit card debt and get into the green with some help from Up? Any new Up account created through this link will give our U:L readers a cool $10 in their account immediately when you use the code URBAN. Seriously—it's a win-win. Code expires 30 September 2020.

Please note this article contains general advice only. Please consider your personal circumstances before making a decision to join Up. Terms and conditions apply when joining. Click here for invite code conditions. Product issuer Bendigo & Adelaide Bank.

Image credit: David Calderon

Editor’s note: This article is sponsored by Up and proudly endorsed by Urban List. Thank you for supporting the sponsors who make Urban List possible. Click here for more information on our editorial policy.

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