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Dialed in on debt: How to manage debt with confidence

From HECS and buy-now-pay-later programs to your first credit card, debt can be a financial tool that – when used wisely – can help you move forward.

By Brooke Le Poer Trench

  • Debt can be a useful financial tool when it’s understood, managed carefully and used for the right reasons.
  • Taking stock of what you owe, spending wisely and paying down high-interest debt can help you regain control of your finances.
  • Building healthy repayment habits and a strong credit history can support your financial goals now and in the future.

1. Understand your debt

Before you can get ahead, you have to get clear. Write down every debt in your name – from your HECS-HELP balance to credit or loan balances – and include how much you owe, your interest rate and repayment terms. CommBank’s Financial Fitness program calls this your “debt snapshot”. It’s a simple way to see the full picture so you can prioritise what to pay down first. Consider starting with the debts charging the highest interest as they’re eating away at your cash fastest.

2. Know good vs bad debt

Not all debt is created equal. Focus on debt that helps you grow, like student loans that boost career potential or a home loan that builds long-term wealth. Then consider debt funding items that lose value or leaving large amounts on high-interest credit cards. Understanding the difference is the first step to using debt as a tool for opportunity, not a trap.

3. Manage spending wisely

Managing cash flow is key to financial savvy. That’s where StepPay can help. It lets you split purchases over $100 into four equal repayments, with no interest, no monthly or annual fees and no international transaction fees. Used wisely, StepPay helps you keep more money in your savings account (earning interest for longer) while managing your spending on everyday items or surprise costs with a little more flexibility.

4. Create a debt repayment plan

The snowball method pays off smaller debts first for a quick win. The avalanche method targets larger, high-interest debts to save more over time. Whichever you choose, automate your repayments so you’re never late and consider putting any extra money towards what’s left.

5. Build a strong credit history

Think of credit as your financial reputation. Pay bills on time, keep debt balances low and borrow only what you need. Down the track, a solid credit history may help unlock better rates or rent a dream apartment – because lenders and landlords notice your good habits. Good credit doesn’t happen overnight but it may open doors you haven’t considered.

Ready to get your money in shape?

CommBank’s Financial Fitness curriculum is packed with simple, practical ways to manage debt, build confidence and take control of your finances.

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Published: 20 January 2026

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An earlier version of this article was published in Brighter magazine.

This article provides general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as personal financial product advice. The views expressed by contributors are their own and don’t necessarily reflect the views of CBA. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider what is appropriate for your circumstances, and where appropriate, consider the relevant Target Market Determination, Product Disclosure Statement and Terms and Conditions available on our website. You should also consider whether seeking independent professional legal, tax and financial advice is necessary. Every effort has been taken to ensure the information was correct as at the time of publishing but it may be subject to change. No part of the editorial contents may be reproduced or copied in any form without the prior permission and acknowledgement of CBA.