Having multiple credit cards can be overwhelming at times. You want to pay them all off, but where do you start? We’ve listed some tips which may help.

Pay off the card with the lowest balance first

This can be an important psychological advantage to ‘get the ball rolling’ and be on your way to living debt-free. If you’re focusing on paying off the card with the highest balance, the whole process may feel never-ending and result in motivation levels decreasing.

Consolidate your debt

If you feel like credit cards aren’t working for you, there are other options. For example, if you have four credit cards which equate to a total balance of $18,000, it may be possible to consolidate them into an $18,000 personal loan. Personal Loans can also help get you into good repayment habits, as you’ll have set regular repayments. It’s important to discuss this with an expert and be aware of any associated fees and charges, as well as differences in the repayments. Keep in mind the size of your debt and the possibility that your bank may require security for this loan amount, sometimes the equity in your home or a motor vehicle may be required.

Put the cards away

It’s unlikely that you’ll be able to take all of your credit cards out of your wallet at once, but taking one or even two out can help. Paying off debt is more difficult, and takes longer, if the debt is still increasing due to continually using your credit cards.

Lower your credit limit

Higher credit limits can result in spending money because it’s available, not because it needs to be spent. If the purpose of your credit card is to pay unexpected bills, try reducing your limit to the amount that one of your most expensive bills may be, rather than have a limit that is well above the price that any bills will realistically be. Reducing the credit limit on just one credit card can even help.

Close each card as you pay off the balance

This will ensure that the debt is gone for good. Paying off the balance and closing your credit card is an achievement worth celebrating before you move onto the next one.

Pay more than the minimum repayment

Your credit card debt won’t shift if you’re only paying the bare minimum at the end of every month. Credit lenders usually set the minimum repayment per month at around 2% to 3% of the balance. That means minimum payments are just paying off some of the interest, and making minimum repayments does not make a dent in your actual balance. Pay off a little extra every month, and you’ll be happy to see your balance reduce.

Are credit cards really that bad?

When used correctly credit cards can be an important asset. They can come in handy for paying unexpected bills, taking advantage of included credit card benefits and keeping cash transactions to a minimum, allowing you to make your cash work for you as you earn interest on it. That is, as long as you pay your balance in full when required, to avoid paying interest.

Of course there are also times where credit cards can disadvantage your financial situation, such as if you struggle to pay the balance on time, you find it difficult to stay under the credit limit and if your spending habits result in ‘living above your means’. This can all produce extra fees and charges, as well as affect your credit score, which can make it difficult to get a loan in the future.

Seek help if needed

Seek help in managing your debts if you feel this has become out of control. If you are having problems juggling your debts, it is important to act quickly to get help. If you just ignore it, you may have difficulty obtaining credit in the future if your credit report is affected. If you need help with your debts, you can:

  • Contact your credit provider - You may be able to organise an agreed repayment plan until you pay off your debt or until a temporary financial problem is resolved.
  • Get help from a financial counsellor - Financial counsellors offer a free service and can help you sort out your debts.

You’re also entitled to obtain a copy of your credit file for free, once every 12 months. For information about credit report providers and their contact details, visit MoneySmart.


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