Several Ways to Pay Off Post-Holiday Credit Card Debt
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Are your bank accounts and credit cards still reeling from an expensive holiday season? Don’t worry – there are several options available to help make your debt a thing of the past. Here are some methods you can use to reduce your debt and make sure that you’re financially fit for the next buying season.
Get a Balance Transfer
Do you have a lot of debt spread over multiple accounts or a large balance on a credit card with a high interest rate? The best solution to deal with this is to get a personal loan. Personal loans allow you to consolidate your debt into one account that has a lower interest rate than most credit cards. This will reduce your monthly payments and cut down on the risk of missing a payment, since you won’t need to track multiple accounts.
Focus on High-Interest Balances First
If you have balances spread across multiple accounts and can’t get a loan to consolidate them for some reason, your best bet is to pick a card that has the highest APR and target that first. Your goal should be to put as much money as possible on the high APR card while paying only the minimum on other accounts. This will cut down on the amount that you pay in interest and help reduce your number of payments in the long run. Once you have the first card paid off, focus your efforts on the card with the next highest APR, and so on until you are debt free.
Consider a Property Lien
If you have accumulated debt from several holiday seasons and are really feeling the crunch, you might need to take drastic action such as getting a second mortgage. Second mortgages offer you certain advantages, specifically that they give you a large amount of money right now. They come at a higher interest rate than first mortgages, but that interest rate might be much lower than any revolving debt you have. This is a drastic measure to take, but it can save you a lot of stress in the long run and help you get back on your feet quickly.
Use Cash for Short-Term Expenditures
One of the biggest dangers of accumulating a lot of holiday debt is the risk of continually adding to your debt even after the new year arrives. To help keep your credit card bills from stacking up even further, try to use cash for as many personal expenditures as you can, at least during the first quester of the year. This will make sure that you don’t wind up dealing with credit card balances that never go away and thus just keep accumulating interest.
Whether you are looking for a plan for future holiday seasons or need emergency help right now, these tips and tricks will help keep you out of the red when it comes to your credit spending. With a bit of patience and preparation, you can enjoy your holidays without leaving your credit cards groaning for months afterward.