Managing debt

Take control of your credit card

4 min read


As useful as credit cards are, they can be an all too easy way to rack up debt if you’re not disciplined. So just how do you go about keeping your credit card debt manageable?

How much can you afford?

Firstly, think about how much you can afford to pay off each month and either ensure you don’t spend more than that or set your limit accordingly. Just as you would for any kind of loan, sit down and make a comprehensive list of all your outgoings — rent, power, internet, rates, mortgage, food, petrol and so on — and subtract that from your income. Your leftover money will dictate how much credit card debt you can service. Ideally, your limit will be an amount you can pay off in full, that way you’ll avoid paying any interest.

Take control of your credit limit

When a bank approves an application for a credit card they may ask how big a limit you’d like (or tell you how much you can borrow), and in some cases they may even offer more than you asked for. Should you take it? If you’re disciplined enough to pay off your credit card each month, a higher limit may come in handy from time to time. However, it can also lead to temptation. Generally speaking, you should only ever borrow as much you need, so if you think a higher limit may get you in trouble down the track, err on the side of caution and reduce the limit to something you can afford to pay off.

More than one card

Multiple credit cards have their uses, however, when deciding whether to take a second card, you should employ the same approach as you would with a single card by looking at the overall level of debt. If you can’t afford the combined tally of two or more credit card bills, then stay away from a second card. Remember too that taking on a second (or third or fourth) card means you’ll be doubling up on annual fees and any other non-purchase related costs.

Take advantage of low-rate deals

One time when getting a second card makes sense is when taking advantage of a low (or zero) rate balance transfer deal — you can save a bundle in interest. Just make sure you don’t carry on spending on the card you’ve just paid off, otherwise you’ll soon find yourself in a worse financial position.

Get smart with credit card costs

Because credit cards are unsecured borrowing, they carry a much higher interest rate. However, most credit cards (but not all, check with your bank) offer an interest free period of up to 55 days that you can take advantage of to save money. Here are a few money saving tips:

  • Pay off your card in full each month. You’ll avoid paying any interest.
  • A 0% p.a. balance transfer for 12 months could be a good way to get stuck into paying off your credit card balance. 
  • Failing that, try and at least pay more than the minimum payment.
  • Set up a direct debit each month so that you never forget to pay and avoid late payment fees.
  • Avoid cash advances as they’re charged at a higher rate of interest and will start accumulating interest from day one.
  • Make sure you understand any and all fees associated with the card so there are no nasty surprises. 
  • Sign up for text and email alerts that tell you how much you need to pay and when.


It’s also important to note that banks can differ on what a customer’s payment will be applied to first. Most banks would apply the payment to the Balance Transfer balance first, but when customers make a payment to their BNZ credit card, it will go towards the highest interest rate balances on their statement before any other charges. This means they’re always paying off the balances that cost them the most before any others. So for customers who take up a 0% p.a. balance transfer offer, any statemented cash advances, for example, will be paid off first because they incur interest at a much higher rate.


BNZ Credit cards

Calculate how much you can save by transferring the balance of your non-BNZ credit card to a BNZ card using our Balance Transfer Calculator.

Our cards give you ultimate flexibility. Whether you want a card that earns rewards or a low interest rate, we've got you covered. Check out our range of credit cards or apply for one now.