The guests are gone. The leftovers have been eaten or stored. Even the holiday bloat has subsided. Life after the holidays is returning to its calm, peaceful norm. That is, until you get your credit card bill in the mail.
Holiday debt affects even the most frugal of us. While you may be shocked and even a little depressed to see your post-holiday credit card bills, don't let it keep you down. With a few steps, you can recover from your holiday debt.
Don't ignore the bills
It might seem like the easiest way to deal with holiday debt is to pretend like it doesn't exist. The truth is, it does exist and ignoring it will only make it worse. Consider this: each month you miss a payment
, you'll get charged a late fee. Not only that, late payments will be reported to the credit bureaus. Miss six payments and your account will be charged-off
. Given that, ignoring bills might not be so easy after all.
Don't add more debt
Seeing your billing statement might instigate post-holiday blues that you're desperate to cure. If you're the type to use your credit cards as therapy, put your credit cards away
now. 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.
Combine your balances
Making small monthly payments on several different credit cards is like digging a hole with a spoon. It'll take longer to see progress paying your bills this way. Shop around for a low interest rate balance transfer credit card
and transfer your balances onto a single credit card. The combined debt is easier to tackle since you don't have to divide your payments among multiple credit cards.
Give it all you've got
Always pay more than the minimum. Put any extra money
toward your debt. The more you put toward your balances, the faster you'll pay them off and the less you'll pay in interest. It will seem like a sacrifice because that's what it is. Rest assured, it will be worth it to have a mountain of credit card debt out of the way.
Focus your effortsIf your holiday purchases spanned multiple credit cards and you can't do a balance transfer, you're better off snowballing your debt. 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. This method is more effective at reducing your debt, then paying a little bit extra on all your credit cards.
Return unused purchasesDid your eyes get bigger than your wallet this holiday season? Don't leave unused purchases in the closet only to be thrown away later. Instead, take them back to the store and get a credit on your credit card. (Note that having a credit to your account doesn't replace your payment for that month.) If the purchase was made with cash or check, you can use the refund to pay down your credit card debt.
Track your progress
One of the biggest motivators of success is success. Seeing your progress will definitely encourage you to keep paying down your debt. Create milestones
for paying off your debt. For example, if you have $4,000 to pay off, give yourself a small celebration each time you pay off $1,000. Knowing that you're making progress will help keep you encouraged.