4 tips to manage your credit card balance

When used correctly, credit cards are a great way to build your credit rating and give you the freedom you need to make important purchases.

Disclaimer: The information contained in this article is of a general nature only and should not be taken as financial or legal advice on any of the topics discussed. Always consult a financial adviser before making any investment decisions.

Credit cards can be easy to obtain and use, but sometimes it can be even easier to let their balances get out of control.

In our guide, we have thought up ways you can be more responsible with your credit cards and keep your balance under control.

Our love of credit cards

Your credit card is one of over 13,000,000 credit card accounts in Australia, a number which has doubled over the last 25 years. Why has this happened? Well, put simply, credit cards are one of the most convenient forms of credit to use, and the most readily available.

We can buy the things we need by tapping our cards, our phones or our watches. The little plastic rectangles we place in our wallets or on our devices are both a blessing and a curse.

It can be easy to lose track of your balance and how much you’re spending when you aren’t physically handing over cash for every purchase. Remember, your credit report and credit score could be impacted negatively by the reaching or exceeding of your limit or by missing a payment.

A credit report is a record of your credit history and contains a wealth of valuable information around, among other things, how many times you’ve applied for credit (including credit cards) your repayment history and how much debt you currently have.

Credit reporting bodies compile your credit history to create your credit report and give you a credit score. Your credit score is usually a number between 100 – 1000 that lenders then use to assess your creditworthiness, which is just a fancy way to compare you against other borrowers.

You can access one free credit report from each credit reporting body every year to keep an eye on how your credit score is tracking. You can also get your credit score

Lenders will use this information, along with the details you provided on your application, to decide if they will approve your credit application and how much they’ll lend you.

For more information on Comprehensive Credit Reporting (CCR), visit the CreditSmart website.

Credit Card debt management tips

When you use your card correctly, it can be a great way to keep on top of your cash flow and ensure that you have enough funds to cover more expensive purchases when you need to.

Here are a few ways you can better manage your credit card balance.

Balance transfer: If you’re going to consolidate a few credit cards into one, think about closing the other cards so that you don’t start to build up more debt on additional cards.

Make regular payments: Paying off your card in full every month means you won’t pay any interest on the balance. Setting up a recurring payment onto your credit card will help you meet your minimum repayment obligations and avoid late fees. If you’re unable to pay your balance off in full every month, consider making more than just the minimum repayment to help reduce the amount of interest you have to pay.

Keep an eye on your account: One of the worst things you can do is not have any idea how much you’ve spent since your last payment. It’s easy to fall into an out of sight, out of mind trap when you’re able to tap and go quickly. Using Internet and Mobile Banking to keep tabs on your balance will help you keep it under control and avoid statement shock, especially after high-spending periods. Regularly checking your account also means that you’ll notice if there are any unauthorised payments and get them resolved sooner.

Review your credit limit: You might like the idea of having a higher credit limit for use in emergencies, but knowing that you have extra credit available could lead to spending more than you need to. Plus, having multiple cards with unused limits could also negatively impact your credit score. You can easily apply for a reduction to your credit limit by contacting us.

If you’re struggling to make your repayments, our Credit Assistance service may be able to help, or you can contact the National Debt Helpline.

Have you heard about our award-winning credit card?

Our low-rate credit card has a great introductory rate that can help you be responsible for everyday payments such as shopping or any small, unexpected expenses.

Our credit card also lets you hold some of your total limit aside so that you will always be prepared for unexpected emergencies.