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Last updated: 11 February 2020

If you’ve been sweeping your debt under the carpet, now is the time to conquer the debt monster once and for all. Here are 7 questions you should ask yourself if you’re currently carrying debt.

 

1. How much debt do I owe?

Knowing how much debt you owe can help you figure out how to strategically cut down your debt. While it might be painful to learn the truth, you must bite the bullet and find out. Start by examining your credit card statements and your loans to get a clearer picture of the total amount outstanding. While you’re at it, take note of all the interest rates, monthly repayments, and any fees and charges so you have all the information in one place.

 

2. What is my plan of attack?

Once you know exactly how much you owe, it’s time to set realistic goals to tackle your debt. Aside from being more cautious of your purchases, you should also find ways to boost your income so you can make extra repayments to pay down your debt sooner.

Not sure where to start? Here are some of our top tips to clear your plastic debt.

 

3. Do I need this?

It’s important to always ask yourself this question before any purchase. Having debt doesn’t mean you have to stop spending entirely, it’s about being smart with your finances so you can identify unnecessary expenses that could be put towards your debt repayment.

If you ever feel like making a cheeky purchase, stop and think about how much it’ll add to your debt and how much longer it will keep you on the debt treadmill.

 

4. Should I stop using my credit card?

If you’ve noticed that you tend to buy things on your credit card, but you wouldn’t do the same if you had to pay by cash, that may indicate you’re over-reliant on your credit card.

Try and change the way you pay. You might find switching to cash can help you be more aware of your expenses so you’re less likely to spend. We cover some interesting points in our article on whether cash could help save you money.

 

5. Do I have the right credit product?

If it’s been a while since you last reviewed the interest rate and features on your credit card or loan, then what better time than the new year to evaluate whether these products are still right for you and your circumstances.

List out the features you need in a credit product and shop around to find one that suits your financial needs.

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6. Should I consolidate or transfer my debt?

Depending on your situation, a low rate debt consolidation loan could help manage multiple repayments better, while a 0% balance transfer credit card could help eliminate the interest rate entirely for a certain period of time so you can focus on paying off your actual debt.

Before you commit to any credit options, weigh up all the costs, features, review the eligibility criteria and the terms and conditions before you apply.

 

7. Do I need help managing my debt?

If you’re struggling to keep up with your repayments, you should consider seeking financial hardship assistance from your credit provider. Most credit providers can offer you support and walk you through the different options available for your circumstances.

It’s important to act fast once you see early signs of financial difficulty as you could prevent negative marks such as late payments and defaults being recorded on your credit file.

 

Remember, you don’t have to tackle your debt alone. Check out our Key Resources page if you require support.

Want to learn more about how you can manage your finances more effectively? Head over to our Learning Hub to get the latest tips and tricks today.