More and more of us are reliant on credit to supplement our income. However, relying on credit can lead to stress and a debt problem which is hard to deal with. Keeping track of your spending and making the decision to start and then maintain a simple budget is a proven way of taking control of your finances.

As the holiday season is winding down, soon many Australians will be faced with credit cards bills that may become unmanageable. Relying on credit can have a long term effect on your finances, so the less you use your credit card, the better.
Ten ways to reduce your reliance on credit:

1. Have Realistic Expectations. We are often guilty of wanting possessions immediately and often before we can afford them which put us into debt and add a significant amount of interest to a purchase.

2. Stop compulsive shopping. Advertising is seductive and often leads us to buying items we don't really need. Before heading to the shops, create a list of what you need and stick to it. If you have trouble sticking to a list, you may want to consider online shopping. This may help curb the urge for buying unnecessary items. But make sure to check if there are delivery fees.

3. Don't be tempted to accept a credit card limit increase unless you need the flexibility and can afford to repay the outstanding balance monthly.

4. Utilise internet access to credit accounts so you can frequently monitor your spending and account balances. You may also be able to set up automatic repayments online to ensure you do not miss a due date. 

5. Reduce your credit card limit. This is extremely important if you want to apply for a home loan. When assessing your loan application, a lender will use the credit card limit. So, even if you do not have any money owing on the card, they will still use the limit in their calculations. If you find that you do not use your credit card, it is best to cancel it before applying for a home loan.

6. Always pay at least the minimum amount each month because severe penalties will be imposed for missed payments. If you are able to afford it, it will be extremely beneficial for you to pay above the minimal repayment amount as you will be able to pay off the debt faster.

7. If you have several credit cards, pay off the credit card with the highest interest rate, fees and charges first. This will lower your monthly interest component which will in turn help you to become debt free faster.

8. Look into transferring your debt to another credit provider or option with lower interest rates, fees and charges.

9. If you are having difficulty making your credit card payments, advise the institution immediately. You may qualify for a repayment variation on hardship grounds or have your interest reduced to help you overcome a difficult period.

10. Bite the bullet and start budgeting. Most people are surprised how easy and effective budgeting is and often kick themselves for taking so long to do it. Don't be like most people - take action today.

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Anouska Linz

Anouska Linz is Manager, Online Sales at State Custodians and has over 10 years’ experience in financial services, both in broking and banking. Holding a bachelors degree in accounting, Anouska quickly discovered a love for mortgage lending and assisting people to achieve their home ownership goals. She leads a team of highly experienced lending specialists who are passionate about finding lending solutions which result in real wins for the customer. She is also a massive netball fan.

For more information on our home loans, visit or call 13 72 62.