More and more Australians are using credit to boost their income.  Using credit this way can lead to stress, relationship breakdown, job loss and a debt problem which is so difficult to deal with the end result is bankruptcy.  With a little planning and tips about money management we can reduce our reliance on credit. Consider the following tips:

Have Realistic Expectations - As a society, we are generally guilty of wanting everything immediately, and often before we can afford it.  Keeping up with “friends” can put us into serious debt on purchases we cannot afford. Think before you buy, do you really need it or do you just want it.

Reduce compulsive shopping - Sales are inviting and can lead us to buying an item we do not really want or need.  As a consumer, be disciplined, create a list of essential items before you go shopping and always cross check these items against your budget. Think before you purchase.

It is so tempting to accept another credit card offer or a limit increase.  Before you accept the extra card or the limit increase, think about whether you need it, more importantly think about whether or not you can afford it.  The credit card providers often fail to adequately review your ability to afford these new cards when they are maxed out.

Monitor your spending habits and account balances on a regular basis.  By doing this more often, you are less likely to make unnecessary purchases of items you really don’t need.

Once you have your credit card balance down to a manageable amount, contact the credit institution and ask for your limit to be reduced.  Maybe even consider cutting up your card and applying for a Debit card.

Always make your payment on time each month as credit institutions impose late payment fees on top of interest and late or failed payments effect your credit rating if you wanted to apply for a consolidation loan.

Pay extra each month on the credit card with the highest interest rate, fees and charges. This will reduce your interest charges and help you become debt free faster.

Explore other lending options with interest rates, fees and charges lower than those on your existing credit card facilities.  This may include a consolidation loan, personal loan or a mortgage consolidation if you are a home owner and have sufficient equity in your property.

If you are having difficulty making your credit card payments, contact the institution immediately as you may qualify for hardship concessions.