How do you avoid credit card debt? Have you ever had one of these thoughts about your credit card statements:

  • Surely there is a mistake
  • This must be someone else’s statement
  • I swear I just paid this last month
  • How did that creep up so quick?
  • Maybe my kids got into my wallet *remembers you don’t have kids*
  • If I just pretend I didn’t see it, maybe it didn’t happen (classic head in the sand)
  • Ill just keep paying the minimum and I am sure it will go away
  • It’s the banks fault its so high because they are charging so much interest
  • Maybe someone stole my credit card *checks wallet- credit card still there*

Then I am talking to you!! Read on.


First things first. When should you have a credit card?


I hear a lot of conversations floating around that to get a good ‘credit rating’ you need to show that you have a credit history. I would argue that it is much more important to NOT have bad debt then to show you have had a credit history. This is like playing with fire, unless you are trained in the appropriate art of fire walking or in this case, cashflow management- credit cards can be risky business!

Unfortunately, this comes from experience. Having advised several members who are feeling, out of control, lost or even debilitated by their credit card situation. It starts by feeling a little behind the 8 ball, or worse, a layer of guilt of secrecy surrounds your debt.

On the flip side there are those who utilise credit cards effectively and never pay any interest. This is like cashflow management masterclass. Unless you have mastered the cashflow 101, no credit cards!

But today, we are talking about avoiding interest to try and get back in control of your credit cards, or get rid of them all together.


If you have an outstanding credit card balance:


  • Stop all direct debits and spending on the card
  • Find the scissors
  • Give your credit card a haircut (chop it)
  • Use a credit card comparison site (e.g. Canstar or similar) and look for a 0% balance transfer preferably with a Nil or 1% upfront fee
  • When your new card arrives in the mail, chop it up too
  • Divide your balance by the number of months you have to pay it off with 0% interest e.g. $10,000 balance, 0% for 15 months = monthly repayments of $667 minimum
  • Sit back and enjoy a bubbles to celebrate a clean slate to start building your financial freedom

Try avoid credit cards all together


  • Don’t get a credit card
  • Instead, split your expenses into lifestyle, bills, emergency and goals
  • Have multiple accounts, with no fees is possible, and have auto transfers set up between your accounts to cover expenses and start savings towards goals

Bonus tip: feeling adventurous? Consider setting up a managed fund as one of your medium or long term goals accounts

  • Sit back and enjoy a bubbles to celebrate a clean slate to start building your financial freedom

Credit Cards for the Master Cashflow Manager & Point Collector


  • Find a credit card on a comparison site (e.g. Canstar) with long interest free periods, aligned points with your chosen airline/ reward programme
  • Apply for a realistic limit on your credit card, even if they offer high balance stick to your guns and your limit
  • Limit the transactions you put on this each month and give yourself a cap. This isn’t what the bank will lend you, but what you can and will be able to repay each month
  • Pay off the full balance of the credit card each month
  • Sit back and enjoy a bubbles to celebrate a clean slate to start building your financial freedom

Here are a few of the main reasons why people are in credit card debt and how to avoid it.

I had to have surgery or had a medical expense

AVOID BY: Having an emergency account. Call this account whatever you want… MOJO, Emergency, Rainy Day account it doesn’t matter but EVERYONE should have one of these. At Pursue Wealth our rule of thumb is 1 month of wage at a minimum.

True Story, one of our members called this account ‘The stupid account my adviser made me set up’ as it was a running joke that she thought she didn’t need one. Fun fact: She was my biggest fan when  her puppy landed in the vet clinic and a $2K bill landed on her lap, and they didn’t need to put this expense on credit or disrupt their financial strategy.

I went on a holiday and didn’t have enough saved, I planned to pay it off when I got back.

AVOID BY: Having a holidays account which you put a little bit aside each pay in advance. If you typically spend $5K a year on a holiday plan ahead. Put small contributions per pay into this account. If you can’t save for it before your holiday, why would you be able to save for it + the interest after your holiday.

I didn’t realise how quickly it would build up.

AVOID BY: Not allowing anyone or banks pressure you into the idea of having a credit card. Little expenses here and there quickly add up and make you loose control.

So, there you have it. Avoiding credit card interest seems to always lead to enjoying a bubbles… so I know what I would do!

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Pursue Wealth Pty Ltd is a wholly owned subsidiary of Grimsey Wealth. Pursue Wealth’s Financial Advisers are Authorised Representatives of Grimsey Wealth Pty Ltd, ABN 90 113 911 247 AFSL 293334

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