Getting over our heads in credit and store card debt is very easy to do in these times.  Paying for new clothes, restaurant meals, groceries, power and phone bills by credit card is very common and people don’t realise how much they have spent on the plastic until the credit card statements come in the post.

With it being so easy for people to get personal loans and enter into store credit deals, it’s no surprise that Australians now have over $20 billion in credit debt, according to the Reserve Bank of Australia.

Some people pay off their full credit card balances every month, but some Australians are so over committed to credit and store cards that they cannot even afford the minimum monthly repayments on their plastic each month.  Some Australians are getting debt consolidation loans to consolidate all their credit and store card debts onto one regular repayment but not canceling their credit cards, so they end up with their cards up to the limits again and a debt consolidation loan to pay off as well.

Here are some ways to get out of debt:

Stop non essential spending, if you have multiple cards, just keep one and cancel the rest.  First, pay off the card with the highest interest then move on to the one with the next highest interest rate and so on.

Consolidate debts by putting all your cards into one with the lowest interest rate and cancel the rest.  If you don’t have a mortgage, speak with your bank about consolidating all your credit cards, store cards and personal loans into one loan.  This way you won’t have to deal with multiple monthly payments and your interest payments should be less.

Consolidate all your debts into your home loan if you have enough equity, but remember you are now paying all your unsecured debts off over a longer period of time.