21 May 2018

Four steps to debt success

It could be your mortgage, your credit card or a personal loan. Whatever your debts are, as they accumulate it can feel like they’re difficult to manage. But don’t lose confidence. While there’s no overnight ‘quick fix’ for debt problems, there are steps you can take to go from debt stress to debt success.

Create a debt ‘hit list’

Start by listing all your debts, including the fees and the interest rate which applies to each one. This will help to give you a holistic view of your debts. Chances are the interest rate on your credit card will be at the higher end of the scale, but it can vary depending on the type of purchase you made on the card.

Analyse your spending and create a budget

A detailed look at your outgoings over a set period could help you identify your current spending habits, and distinguish between essential and non-essential spending. Consider whether you can redirect any non-essential expenses to make extra debt repayments, and then draw up a household budget to make it easier for you to stick to your plan. Take a look at some of our hacks to get your household spending under control.

What’s more – your credit card could have features to help you to stay on top of your spending in the future. ING’s Orange One has a feature that gives you notifications when you’re close to your card limit or a limit that you specify. This is super handy when life gets a bit frantic.

Pay off high rate debts first

Once you have identified how much cash you can put towards making extra repayments, work out which debt to eliminate first. Due to the power of compound interest, it could make sense to allocate any additional repayments to the debt with the highest interest rate. In the meantime, keep making the minimum repayments on all your remaining debts.

For instance, ING’s Orange One has a lower rate for installment payments, so these might be lower on your hit list than other credit card repayments. It’s also worth keeping in mind that the Orange One doesn’t have a higher interest rate for cash advances when compared to purchases, unlike other cards. Check with your card provider so you have all the facts.

Once you’ve paid off one of your debts, put the money you’ve been using to pay off this debt towards extra payments on debt number two on your hit list, and so forth.

If you have equity in your home, and a number of short term debts you wish to clear quickly, you may be able to refinance your home loan and use some of the equity to pay off the short term debt. Speak to your broker of financial adviser for advice specific to your situation.

Ask for help if you need it

If you are in serious debt and struggling to meet regular minimum repayments, it may feel particularly overwhelming. Rather than ignoring the problem or missing a repayment, speak honestly to your lender about your situation so they are aware and can help you take back control of your finances.

Credit card debt is one of the most common causes of debt stress, but there’s no reason to lose confidence. Exploring your card options can help you find one that suits your lifestyle better. To find out about the benefits of ING’s Orange One and how you can apply, visit here.

Information and interest rates are current as at the date of publication and are subject to change. Limitations and exclusions apply to the establishment of instalments, including minimum purchase values, number and term of instalments. Interest free period available only where entire revolving balance plus monthly instalment amounts are repaid in the previous statement period. All applications are subject to ING’s eligibility and credit assessment criteria. Fees and charges apply. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Before making any decision in relation to our products you should read the relevant Terms and Conditions, Fees and Limits Schedule, Key Facts Sheet, Credit Guide, Cashback Rewards Terms and Conditions and Complimentary Insurance Terms and Conditions available at ing.com.au. To view these documents you may need Adobe Acrobat. Products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292 AFSL 229823, Australian Credit Licence 229823. Rebate Offers for Orange One and Orange One Platinum Customers.  The Global ATM Rebate Offer and the Foreign Currency Conversion Fee Rebate Offer will apply for the next calendar month when you perform the following during the current calendar month: – deposit at least $1,000 from an external bank account to any personal ING account in your name (excluding Living Super and Orange One), and also make at least 5 card purchases using your ING debit or credit card (excluding ATM withdrawals, balance enquiries, cash advances and EFTPOS cash out only transactions). Card purchases includes in store credit or EFTPOS purchases, online purchases, regular card payments, payWave, Apple Pay, and Google Pay transactions made with an Orange Everyday Visa card, Orange One or Orange One Platinum Visa card or Nil Interest Visa card provided with an eligible ING home loan. Card purchases made in store or online this current calendar month which settle next calendar month do not count towards the 5 card purchases needed this current calendar month. When determining if you are eligible under the offer, we also take into account the behaviour of any of your joint account holders or additional cardholders. If eligible: for ATMs in Australia – any ATM fee charged by the ATM operator is rebated immediately following the transaction, for ATMs outside Australia – ING will rebate the International ATM withdrawal fee of $2.50 immediately after it is charged and rebate any ATM fee charged by the ATM operator at settlement of the transaction. While the transaction is pending the amount of the acquirer fee will be deducted from your available balance and will be reinstated after the transaction is finalised. ATM transactions outside Australia can take up to 5 business days to finalise, and  – for ING international transaction fees. ING will rebate the Foreign Currency Conversion Fee of 2.5% of the amount of the international transaction immediately after it is charged. Merchants may charge you a separate fee for their services (which is not rebated under this offer). This offer may be changed or withdrawn at any time at ING’s sole discretion. The ING cash advance fee is not rebated under this offer. Apple Pay is a trademark of Apple Inc., registered in the U.S. and other countries. The Apple Pay Terms and Conditions for ING customers are available to consider when setting up Apple Pay on your eligible iOS device. Android Pay is a registered trademark of Google Inc. The Google Pay Visa Debit Card Terms and Conditions for ING customers are available to consider in the Google Pay app.

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Home and Contents Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.

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