The journey to being credit card debt free

Many of us tend to live in denial when it comes to credit card debt, so if you find yourself scraping to make the minimum repayments each month and generally going nowhere, it’s time to face up to debt.

Plan your approach

If you’re serious about wiping out that credit card, you’ll need to do a few things. First, eliminate the spending habits that created the debt. Then make a plan for the money you have coming in. Next devise a strategy to pay off the debt, and finally, introduce ways of being good with money so that you avoid slipping back into old ways.

Eliminate the negative

Getting control over your debt means understanding how and why you got there in the first place. To do this, you need to take an honest look at your spending habits and identify places where you can stem the flow of money out of your accounts. You’ll need to be brutally honest and ready to make sacrifices in order to free up money that can be funneled toward the debt. The best way to do this is to create a budget which will become your blueprint for the future. We have tips and a framework for doing this on our website.

Cut interest costs

When it comes to interest, the longer you have a debt, the greater the cost; and that’s money that would be better off paying down your debt. So get smart about it, study up on the cost of borrowing and minimse your interest costs.

One way of doing this is to shop around and find the lowest credit card interest rate you can. Chances are your bank will have a low rate card that you simply don’t know about. Talk to your bank, let them know what you’re trying to achieve and get some expert input.

Find a strategy that suits

Paying down debt can be a personal thing that means finding a strategy that works best for you. For instance, if there are multiple debts involved, some people prefer to tackle the larger amounts that carry the highest interest costs first. Others might find success by knocking off the smallest debt first to get a few quick wins under the belt.


If it all seems too much, a debt consolidation loan can be a good way of condensing many debts into a single, easier to manage loan. This tactic helps by creating a degree of certainty around your monthly costs. A personal loan typically has a set term of a few years with repayments that are the same each month. This makes budgeting easier since you know exactly what’s coming up. If you already have a personal loan or a home loan, check up on some of the many options on offer from your bank as there may be a more cost effective option for you.

Balance transfers

Another way to accelerate paying off your card is a balance transfer — these offer an even better deal on interest costs, albeit over a shorter period. Most deals will have a special rate for 6 to 12 months on the transferred debt before reverting to the standard interest rate. If you’re able to pay more in a shorter period of time (and are disciplined enough to not spend on the card at the same time), this can save you plenty in interest charges.

Staying debt free

When the end is in sight, it’s time to think about how you can stay debt free. Start by lowering your card’s limit to something more manageable — while you’re at it, tell your bank you don’t want to be offered credit limit increases unless you ask for them. Pay your card off in full at the end of each month to avoid interest altogether and don’t use your credit card to withdraw cash as this attracts a higher rate of interest that starts accumulating from day one.

Trying to get on top of your credit card debt? Visit our calculator to see how much you could save with a balance transfer and find more information or apply for one here.


To help in your journey of being debt fee with BNZ  you can set up a text alert when a credit card or personal loan payment is due.  This can be a good reminder to make sure you don’t miss a payment. 

1 Like

“…finding a strategy that works best for you…”

Unfortunately a strategy that works best for you won’t necessarily work for your bank.

I sent cheques to my previous bank complete with a workable repayment plan and they returned the cheques and chose not to accept my repayment plan. However they did offer a monthly repayment plan which was 75% of my monthly income!

If you get into strife with unsecured debt, you will literally be paying for it for the rest of your life.