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If you don’t pay your credit card off each month, follow these simple steps to take control of debt from ME Bank.

Are you a ‘revolver’ or a ‘transactor’? Credit card holders can be largely divided into two camps – revolvers, who don’t pay off their card in full each month, and transactors, who always pay off their card in full to avoid any ongoing debt.

It’s not uncommon that credit card holders switch between the two camps; for example, revolving more around Christmas, after a holiday, or after the back to school rush, and reverting to transacting for the remainder of the year. Either way, it’s worth knowing which type you predominantly are so you can help cut your card costs.

If you are largely a transactor, give yourself a pat on the back for avoiding revolving card debt and related interest charges. On the other hand, if you are largely a revolver and deal with ongoing or partial debt throughout the year, you might want to opt for a low rate credit card, or consider a 0% balance transfer offer and pay it off before the expiry date.

Shop around for a low rate credit card

Unfortunately, plenty of revolvers are probably paying more interest than necessary on card debt. ME research commissioned by RFi Group has found nearly seven out of ten revolvers are in the dark about the rate they’re paying on their credit card and whether their card is at the expensive end of the spectrum.

With Australians collectively owing around $32.5 billion in card debt , it’s clear big savings are up for grabs by switching to a lower rate card. Thankfully, there is a good selection of low interest credit cards – less than 12%, in some cases.

Choose a card with minimal annual fees

Sticking with a high rate card isn’t the only mistake revolvers may be making. The annual card fee can also be an additional cost burden.

The combination of a high ongoing rate and a hefty annual fee can make it a lot harder to get out of card debt. But it doesn’t have to be such a struggle. Some credit cards combine a low rate with zero annual fees. The trouble is, one in two revolvers is unaware that low fee credit cards or even no-fee credit cards exist.

The solution is simple. If you’re a revolver, switch to a low rate credit card while doing away with annual fees. There are many good value deals out there that can put money back in your pocket – cash that can then be used to pay a bit extra off your card each month to clear the slate sooner.

This article was provided by ME Bank, a bank that is 100% owned by industry super funds, including Vision Super.

Members Equity Bank Limited ABN 56 070 887 679

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