How to Recover from Holiday Credit Card Debt
Holiday shopping is a wonderful experience, until the credit card bills start rolling in. Once the joy of the giving has passed, you stare at the painful task of paying the bills. There are several ways to recover from holiday credit card debt in order to get back on your financial feet.
Prioritize Your Payments
A handful of credit cards give you the opportunity to skip a payment in January or February. If one of your cards has this option, focus on paying off more of the balance on your other cards.
If you have one credit card with a higher interest rate, make the minimum payment on the low interest cards and apply as much money as possible toward the principle on the high interest card.
Consolidate Your Debt
If you have accumulated credit card debt on multiple cards, you may want to consider consolidating all of your balances into one card or loan. In doing this, you have to compare the fees of the transfer to your current interest payment. If you already have low interest rates across the board, it may not make sense for you to consolidate. You just need to make your payments on time.
Consider the balance transfer fee on any card you use for consolidation. This is a fee that is added to whatever balance you are bringing over from another card. A handful of cards, such as the Chase Slate card, have no balance transfer fee if the transfer is made within a certain period of time. In this case, you can transfer the balance without incurring additional expenses.
Pay More Than the Minimum
If all you do is pay the minimums on your credit cards, you are going to be riddled with debt for years. Instead of doing that, you need to put as much money toward your balance as possible. This may be something as small as $10 extra every paycheck, but paying these additional amounts will benefit you over time.
Also, make micropayments throughout the month. Every time you have some extra cash, apply that money to your credit card balance. Making these additional payments during the month are very beneficial to paying down your debt.
Make Biweekly Payments
If you pay a certain amount toward your credit card balance each month, try making half a credit card payment every two weeks. By doing this, you will make one extra payment by the end of the year. Paying once a month only means you will be making 12 payments. If you pay once every two weeks, you will be making 26 half payments, which equates to 13 full payments.
Make Personal Sacrifices
You got a chance to splurge for the month of December. Now it’s time to cut back and regroup. You might be tempted to take advantage of first-of-the-year sales, but you need to recognize the current state of your finances. Rather than buying that awesome pair of shoes you saw at the mall, you can put that shoe money toward your credit card balance.
If you do not feel you can control your spending, avoid the temptation entirely. In the example above, you might not want to go to the mall for a month so you do not see shoes you feel you “have to have.” Aside from food and shelter, you don’t “need” anything. You just have to realize when your wants are taking over.
Think of this whole process as a step toward a better future. You will feel so relieved when you finally pay off your credit card, and then you won’t have to think about this burden. Use the tips above to recover from holiday credit card debt, and you will be free in no time.