In the lead up to Christmas and the Christmas shopping rush it’s easy to lose track of how often you pulled out your credit card.
Cue the bad news in January when your credit card statements arrive. But paying off Christmas debt quickly can help reduce interest and other accumulated charges. Or even worse - debt collection demands.
Here are some steps that you can follow to help deal with post Christmas debt.
Know Your Debt
Before the bills arrive, take some time to add up how much you spent and where. You can use your receipts to tally up your purchases or even take a look at your statements online. Don’t forget to include all purchases that you made on payment plans (including Afterpay and ZipPay), deferred lines of credit and store credits.
Budget, Budget, Budget
The most important step in paying off your Christmas credit card debt is setting up a budget to see how much spare money you have available each month to aggressively pay off your accumulated debt.
Pay Off High Interest Debts First
Prioritise your loans or credit cars and ease the pain of interest fees by paying off the ones that are incurring the most interest first. It can save you a lot of money in the long run.
Consider a Debt Consolidation Personal Loan
If you have large credit card debts hanging over your head, a personal loan might be the cheapest option for you. A personal loan often offers a lower rate than the average credit card and gives you a set repayment calendar and time frame. A personal loan doesn’t allow you to build up more debt whilst already paying back what you owe.
If you are feeling the pressure to make repayments, speak to your credit provider(s). Don’t just ignore it and skip payments - if you do this your credit score will suffer. You may be surprised to know that many credit providers can put you on a different payment plan schedule, making it more feasible to meet your repayments.
Consider Expert Help
If your post-festive debt is massive and you don't know where to start? Then consider talking with an expert for their suggestions. You can try any financial advisory service or credit counselling agency for hep. Once you initiate contact you will receive guidance on budgeting skills or other financial education you might want.
Use Annual Bonuses & Tax Returns for Debt Repayment
Some people receive an annual bonus from their employer in December or January. Whilst it’s tempting to look at that money as a windfall to buy lots of fun items, take a step back for a moment and look at the bigger picture. These kinds of windfalls actually give you a unique opportunity to take care of those pesky debts and get your financials in order for the start of 2018.
It’s never too early to start planning for next year. You may want to consider opening a specific saving account and putting away $10 or $20 per week so that by this time next year, you will a have significant amount of money on hand, ready to use.
Whatever plans you makes, take control now and don't let you christmas debt hangover become a real problem.