The holidays have come and gone, now you're left with a smaller bank account and possibly more credit card debt than you'd care to admit. Getting back on your feet financially can be tough after the holidays, but it can be done. The steps for doing so are easy and if you stick to your guns, you can skip the blues that usually come after the holidays when the credit card bills start to roll in Let's take a look at some of the tips that you can use to help you get out of your after-holiday rut.
Don't Pretend the Bills Don't Exist
Turning your cheek the other way on your accumulated holiday bills is not the answer. This will only make the problem worse as interest rates continue to tack on more debt. Not only that, you will have late fees to worry about for each month that you don't pay. Then after a while, the bill will go into collections and be reported to the credit bureaus, downing your credit rating. There is an ugly snowball effect when you choose to try and pretend your holiday bills don't exist.
Keep Your Credit Cards at Home
To keep from adding more debt to your holiday debt, you should stop using your credit cards until you have caught up. Using your credit card will only make paying off your debt longer. Instead, you should carry around cash or an ATM card, so that you won't have a need to use your credit cards.
Combine Balances Using a Balance Transfer Card
Simply making minimum monthly payments on your credit card bills is like digging a ditch with a teaspoon. To see faster progress, you can use a low interest balance transfer credit card. With this card, you can transfer all of your balances over to that one credit card, then you only have one debt to pay.
Pay More than the Minimum Payment
Another way of digging a ditch with a teaspoon is paying off your credit cards by putting only the minimum amount allowed each month. The more you can put on your credit cards the faster you will be able to come out of debt. This will also minimize the amount you'll end up paying on interest.
Pay in Lump Sums
To help pay off your debts faster, you can start paying off your credit card balances all at once. Debt consolidation may be an option as well. Start off with the smallest debt first or the one with the highest interest rate. You'll quickly find yourself out of debt with this method. It sure beats making monthly payments for the next three years. Just make sure to continue making minimum payments on the other credit cards until their turn comes around to be paid off in one lump sum.
Return Gifts to the Store
If you purchased items over the holidays that are just sitting in the closet, why not return them and get credit back to your credit card? If you used cash or a check, you can use the funds towards your current credit card debt.
Keep Track of Your Progress
To help keep you motivated to get rid of your holiday debt, you can write down all of the debts that you have paid down. Seeing this will show you how well or bad that you're doing. It is a great motivator and you can even celebrate any time you have paid off a credit card balance completely.