Don’t have your Nedbank ID yet?
Nedbank ID single sign-on gives you full digital access to Nedbank’s banking and lifestyle products and services on the Money app or Online Banking.
Log in
Log in to Online Banking or another one of our secured services.
Bank how and when you choose to, with the low fees or extra benefits you want.
Shop online or instore and earn rewards for it, with up to 55 days interest-free credit.
Buy foreign banknotes, transfer funds or shop globally with a travel card.
Great interest rates, with great flexibility and access to your money when you need it.
Personalised interest rates for affordable loans from R2,000 to R300,000.
Loan up to 100% of the property value or up to 105% if you are a first-time home buyer.
Choose a plan for yourself, family or build your own cover to suit your needs.
Get cover for your car, building, house contents, valuables and more.
Cover your bond, credit card, overdraft, loan and car repayments.
Choose a plan for yourself, family or build your own cover to suit your needs.
Take the right steps to achieve your financial goals with expert financial planning.
Plan for everything you own and owe, so your estate is in order when you’re gone.
Accounts
-
Everyday banking Safety, convenience and rewards
-
Youth banking For under 16s, or under 25s
-
Accounts -
Digital wallet Your phone is your bank account
-
Private Wealth The globally integrated account
-
Goal saving Easy access to interest earned
Credit cards
Digital banking
Switch to Nedbank
Fraud awareness
Forex
Rewards
Accounts
-
On demand Money available at any time
-
In 24 hours Cash in your hand the next day
-
In 32 days Funds ready within a month
-
End of term Investments left until maturity
Investment services
Share trading
Personal loans
Home loans
Student loans
Overdrafts
Vehicle finance
Solar finance
Life cover
Funeral cover
Short term insurance
Credit Life
Travel insurance
Is your business covered?
Secure Investments
Financial planning
Estate, wills & trust services
Nedbank Private Wealth
Speak to a financial adviser
Blog
Talk to us
Find us
- Login & Register
- Online Banking
- Online Share Trading
- NetBank Business
- NedFleet
- Nedbank Greenbacks
- Nedgroup Investments
- Nedbank ID
- Bank
- Accounts
- Credit cards
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Rewards
- Explore Bank
- Accounts
- Everyday banking
- Youth banking
- Accounts
- Digital wallet
- Private Wealth
- Goal saving
- See all accounts
- Get help choosing
- Family Banking
- Refugees and asylum seekers
- FAQ
- How-to guides
- Everyday banking
- MiGoals Premium
- MiGoals Plus
- MiGoals
- Discontinued accounts
- Youth banking
- Nedbank4Me
- Digital wallet
- MobiMoney
- Private Wealth
- Private Wealth Bundle
- Goal saving
- MyPocket
- American Express
- Amex Gold
- Amex Platinum
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Send and receive
- Rewards
- Save & Invest
- Accounts
- Investment services
- Share trading
- Explore Save & Invest
- On demand
- Club
- Money Market
- Stokvel
- In 24 hours
- JustInvest
- PlatinumInvest
- Tax-free Savings
- MoneyTrader
- EasyAccess Fixed Deposit
- PrimeSelect
- In 32 days
- Electronic 32Day Notice
- 32Day Notice
- End of term
- Tax-free Fixed Deposit
- Electronic Fixed Deposit
- Electronic Optimum Plus
- Platinum Fixed Deposit
- Fixed Deposit
- OptimumPlus
- Investment services
- Share trading
- Borrow
- Personal loans
- Home loans
- Student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Explore Borrow
- Personal loans
- Consolidation loan
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Explore loans
- FAQ
- How to guides
- Consolidation loan
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Home loans
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R29,600 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Explore home loans
- FAQ
- How to guides
- Track application
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R29,600 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Student loans
- Explore student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Insure
- Life cover
- Funeral cover
- Short term insurance
- Credit Life
- Travel insurance
- Is your business covered?
- Secure Investments
- Explore Insure
- Life cover
- Get a call back
- Explore MyCover life
- Funeral cover
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Get a call back
- Explore MyCover Funeral
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Get a call back
- Explore MyCover short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Credit Life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Get a call back
- Explore credit life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Travel insurance
- Is your business covered?
- Secure Investments
- Guaranteed Growth Plan
- Guaranteed Income Plan
- Get a call back
- Explore MyCover Funeral
- Guaranteed Growth Plan
- Guaranteed Income Plan
- Plan
- Financial planning
- Estate, wills & trust services
- Nedbank Private Wealth
- Speak to a financial adviser
- Explore Plan
- Financial planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Estate, wills & trust services
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Nedbank Private Wealth
- Speak to a financial adviser
- Learn
- Blog
- Explore Learn
- Blog
- Contact us
- Talk to us
- Find us
- Explore Contact us
- Talk to us
- Find us
3 strategies to pay off your credit card debt
3 strategies to pay off your credit card debt
Staff writer
Posted 03/12/2021 Updated 15/08/2023 3 mins
Properly managed credit is a tool you can use to make the most of your finances.
Many people misunderstand credit cards and debt in general. Debt should be a helping hand, and taking on debt is not necessarliy a bad financial move. For instance, very few of us would be able to buy a house or a car without debt.
However, what you consider the right level of debt will be different from what your neighbour or work colleague considers a reasonable level. How we go about achieving our debt goals will differ from one person to the other.
The best way to see your debt is as a tool you’re able to manage. Credit cards, for example, can represent convenience and security. Pay off the full amount every month, and a credit card makes shopping an interest-free, cashless experience, whether in-store or online. And if you do keep a healthy balance available on your credit limit, it can also help you afford unforeseen emergencies.
Rethink your credit card as a tool
If you are easily tempted into instant gratification, you may not be using your credit card tool correctly. It’s easy to fall into the trap of buying stuff you don’t really need ‘on plastic’, just because you can.
And once you get to a point where you can’t pay off the full amount every month, but only the minimum payment required, you start paying interest upon interest for as long as you can’t settle the full balance. And the more credit cards you have, the more times you can repeat this mistake.
If you find yourself in this position, you need a reset. You need to pay off some credit card debt, which will get rid of the interest weighing down your finances. You may want to cancel some of your cards once they are paid off – especially those with the highest interest rates.
It’s not a good idea to cancel all your credit cards, though, as we explain here. The trick, going forward, is to use your remaining cards responsibly, as described above.
Paying off your cards 1 by 1 is possible, even if you can only afford to keep paying the minimum amount due – as long as you have the discipline to stop adding any more debt to the card until you’ve paid off the full balance.
Here are 3 different strategies you can try when tackling credit card debt. In all 3 approaches, you start by paying the minimum amount due.
1. Snowball strategy
We might not get much snow in South Africa, but we still know that a snowball grows in size as it rolls down a hill, picking up more snow. You can apply the same idea to your debt repayment strategy.
How this works: you pick the card with the smallest balance remaining, and focus on paying it off. Once you’ve managed that, you move on to your card with the next-smallest balance.
But now, you add the amount you were paying off on the smaller balance to your monthly repayments. This means that you’ll be able to pay off the second card quicker than you would have, because the amount you’re paying every month is larger.
Your credit cards can be a source of convenience and peace of mind, rather than a nagging, ever-growing debt
You can now continue with this process of settling the balance on each and adding the amount you have been paying to the next card on your list.
The major benefit of this approach is that you’re continually encouraged to stick to your strategy. Firstly, you can see your total credit card debt getting smaller, and secondly, every time you clear the balance on a card, your repayments can get bigger and reduce your debt even faster.
2. Avalanche strategy
A different approach is to target the card with the highest interest rate. Stop using it for purchases, and focus on clearing the balance, even if you can only afford the minimum instalment.
The avalanche approach helps reduce the total interest you end up paying, because you get rid of the most expensive debts first. And like you do with the snowball approach, once you’ve paid off one card completely, you add the amount you had been paying on it to your monthly payments on the card with the next-highest interest rate.
The major benefit of this approach is that you minimise the amount of interest you pay in total.
3. Lasso strategy
The last approach that you might want to consider is all about simplifying and consolidating what you owe on your credit cards. You’re lassoing your cards, and corralling them in one place. This can have a major psychological benefit: it reduces the monthly stress of having to manage multiple payments.
When done correctly, it could even reduce the total amount you pay back. This is possible if you’re able to get a lower interest rate than those you are currently paying on your other credit cards. When you open a new credit card account with Nedbank, you can get a preferential rate for a limited period if you transfer the balance from another bank’s credit card.
Of course, how much you can transfer from other cards depends on the credit limit on your new Nedbank card. But whatever amount you can transfer, the preferential interest rate adds up to savings, no matter which strategy you’re using to pay off your other cards.
By reducing your credit card debt, and only hanging on to 1 or 2 cards with the lowest interest rates, you can rein in unnecessary spending and improve your finances overall. From there on, if you use this financial tool wisely, your credit cards can be a source of convenience and peace of mind, rather than a nagging, ever-growing debt.