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Getting Credit Card Debt Under Control

Getting Credit Card Debt Under Control

Wellington Office Manager Raeanna Thomas, who features in the latest Sorted campaign, has learnt some hard lessons about using credit cards. She hopes that her Sorted journey will help others understand what they are getting into.

“I was naive and easily sucked in. It seemed like everyone had a credit card so I thought it was a pretty normal thing to do,” said Raeanna.

After going on sorted.org.nz, Raeanna’s focus is now on paying off her credit card debts as quickly as possible to minimise the amount of interest.

“Some people pay off their card each month and avoid paying interest at all, but if like me, you don’t pay it all off monthly, the accumulating debt can become overwhelming.

“I was shocked when I used the credit card calculator on Sorted and discovered that if I continued paying my debt at the current rate, the interest I’ll have paid will be nearly the same amount as the original debt.

“I think fewer people would get into debt with their credit cards if they did the math beforehand. If you defer the purchase until you have done the credit card calculations on Sorted, you might decide to save for the goods or even go without,” said Raeanna.

Retirement Commissioner Diana Crossan says that’s where the other tools on Sorted can help.

“If you have set your financial goals, and are using a budget you will know if the purchase is part of the plan or a spur of the moment desire. It’s not about denying yourself something – it’s about making good spending decisions which won’t derail your plans for a more secure financial future.

“We know that the recession is hitting many New Zealanders quite hard and that the temptation to cope by borrowing is very real. But debt can have long term implications - if it adds up it can limit your choices.

“If you do use a credit card follow the tips on sorted.org.nz,” said Diana Crossan.

Raeanna used the Sorted Credit card calculator:

www.sorted.orgnz/calculators/credit-card/

ENDS

© Scoop Media

 
 
 
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