How can I be smarter with my credit card?


If you are disciplined with your credit card repayments, you may avoid paying more than you have to. If you can’t pay back the minimum amount you owe on time, you’ll accrue interest that could dramatically increase what you owe.

Managing credit card debt

If you have existing debt on your credit card, consider the following tips to manage it in a smart way.

  1. Know how many cards you have and what you’re paying for them. If you’re not sure how much you’re paying in interest, check out MoneySmart’s credit card interest calculator.
  2. Cut back to one card – this could help you save on fees and make your finances easier to manage. Many providers offer great rates to consolidate, but make sure you pick the right card for you in the long term. And make sure you pay the card off during any honeymoon period with the new provider so that you don’t start accruing interest.
  3. Start paying your credit card on time to avoid extra interest or late payment fees. If you can’t pay in full, 
    • pay more than the minimum repayment each month to reduce your balance more quickly and save on interest
    • set up a direct debit to pay a fixed amount off the balance owing each pay day and,
    • if you can only make the minimum monthly repayment, switch to a card with a low interest rate and pay off more when you can.
  4. Keep track of your spending with MoneySmart's mobile app TrackMySpend so you stay within your limit.
  5. Try to avoid cash advances because they may attract higher interest rates.
  6. Use store cards wisely and be aware of what fees you'll pay – they are just another form of credit card.

Choosing a new credit card

If you’re looking for a new credit card, it’s important to shop around for the best deal and to know exactly what you want. Interest rates and annual fees can vary widely between providers, so it’s important to do your research. And remember not to be too tempted by rewards programs. While these can be attractive, high interest can far outweigh the benefits of a great rewards program.

Important information

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This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.