Holiday debt affects even the most frugal of us. Here are four steps to help you quickly pay it down and recover.
1. Put away the credit cards
If possible, do not add more debt. Charging more will only lengthen the time it takes to pay off your debt. Curb your spending by thinking of every $50 you charge as another month you’ll be in debt.
2. Consolidate your debt
Making small monthly payments on several credit cards can feel overwhelming. It takes longer to see progress paying your credit card debt this way. Consider shopping around for a low interest rate balance transfer card like LGFCU’s Visa® Credit Card and transfer your balances onto a single card. The combined debt is easier to tackle since you don’t have to divide your payments among multiple credit cards with varying interest rates.
3. Always pay more
Paying more than the minimum helps pay off the balances faster. The more you put toward your balances, the faster you’ll pay them off and the less you’ll pay in interest.
4. Focus your efforts
If your holiday purchases were made using multiple credit cards and you can’t do a balance transfer, consider paying off your debt with the snowball effect. This means making large payments to one credit card while continuing to make the minimum payment on the rest of the cards. Then, once the first card is paid off, send the lump sum payment to another card, and so on until your holiday debt is completely repaid.
Knowing you’re making progress will help keep you encouraged. Now is great time to make a plan to first take control of your holiday debt and then get ready to save thousands of dollars in the coming year.