Scott Pape: Welcome to the Barefoot Investor’s
60, 60, 6 challenges. Helping you get more money smart by the minute. As your newly appointed debt doctor, the first thing I’d
like you to do is take a 60-second financial health check. Now checking your credit report is the first step towards
owning your credit and actually dealing with debt. If a potential lender sees something on
your report that makes them nervous, the chance of you getting credit reduces accordingly. It affects credit cards, car loans, store
loans and even home loans. And, most people don’t even know they’re
entitled to access their credit report for free. So jump online to ASIC’s MoneySmart website,
where you’ll find a list of credit agencies and how to get a free copy of your credit report. Over the years I’ve helped thousands of people
use this deceptively simple strategy to get a better deal on their credit cards, and now it’s your turn. See, like any business, the banks don’t like losing
customers without a fight and you can use this to your advantage. So, here are three simple steps that can potentially save
you big bucks on your credit card, all in under an hour. First, find out what the best credit card rates are. Have a hunt online to see what’s on offer or visit a comparison site. Second, find a card with a low rate and no annual fee or balance transfer fee, then write down the name
of the card and the institution offering it. Third, ring your bank and tell them that you’re
switching if they don’t match the deal. Remember it costs your bank more to attract a
new customer than it does to keep you happy. The real lesson is to be proactive and always remember
the Barefoot Rule – if you don’t ask, you don’t get. The best way I’ve found for people to crush credit
card debt is through my Debt Domino plan. In fact, some people have told me that domino-ing their
debts was the most financially uplifting experience of their life. So here’s what to do – first, list all your personal debts,
except your mortgage and HECS on a piece of paper. Arrange them from smallest to largest down the page. Next, go through your list and write down the
minimum repayment required for each one. Pay these like clockwork or you’ll get a
black mark on your credit report. Now, on top of keeping up your minimum repayments,
throw everything you can into paying off your smallest debt domino. Knock it over as quickly as possible – take a
few extra shifts at work, or sell some stuff online, or do whatever you can to raise extra cash. Keep a running tally on the fridge so you’ll
see your progress every single day. When you’ve knocked down your smallest
debt domino, celebrate your win, then move on to the next-smallest debt, then the next. Finally, celebrate big time when you
knock down your last debt domino. Some people prefer to pay down their debts starting with
the highest interest rate first but it’s really up to you. You can check out MoneySmart for more tips on credit cards. In my experience, you’ll pay off more debt, faster,
by starting small, and celebrating each win, and using the momentum to tackle bigger debts until
you break the debt cycle and become debt free.