Finally the festive season is over! The fun and frolic has ended and it is now high time we get back to our everyday lives. This means that we can now expect credit card bills knocking at our doors in the coming weeks. This will actually show the reality of our holiday celebrations. In a research conducted by the American Research Group, it was found that shoppers wanted to spend an average of $845 for gifts in the holiday season. Most of this amount was likely to be charged on retail and bank credit cards.
It would have been better if we could have paid off the balances in full and started 2013 without any credit card debt. But it is a fact that most of us don’t have the cash on hand to do that. So, what can we do to come out of the holiday credit hangover? Let’s take a look:
Steps to get rid of holiday debt:
It won’t help you much in punishing yourself if you have overspent your budget! We have to understand the fact that holidays are a time to celebrate! But again, there should be a proper plan in place in order to pay down the holiday debt. This will help you in saving your scores from any kind negative impact.
- Prioritize the cards that you want to pay off first: You should try and prioritize paying off your credit cards in such a way that you can get rid of the highest interest rates first. If you do so, you will be able to save money on the amount of interest charges you pay. Even paying a small extra amount over the minimum payment due will help you in saving money on interest rate payments.
- Make minimum payments at least: You should make sure that you make minimum payments toward the amount owed on each card before the due date. This is better than a missed payment. If you miss a payment, then there will be a larger negative impact on your credit scores.
- Check out the new charges on your credit cards: You must know that the interest fees on credit cards are usually charged on the average daily balance. The charges don’t depend solely on the balance that was not paid in full from the last billing statement. Thus, there’s no grace period in the whole process.
You should note that you can ease the pains of your holiday overspending on credit cards with the help of good financial planning and more importantly sticking to it.