The holiday season has to come to an end, and to some the New Year brings credit card statements reminding you of the gifts and other purchases you made for the holidays. If you racked up credit card debt when holiday shopping this year, have no fear, we will give you a few tips on how to pay off your credit cards. Setting up a plan can keep holiday credit card debt from going deep into 2017.
Get Organized – Collect your statements and see just how much you owe. In order to set up a plan to pay off debt, it’s important to know exactly how much you need to pay back.
Budget Time – If you have a budget, take a good look at it and see why you fell into debt. If you still don’t have a budget, it’s time to establish one that works for you and your family. One thing to try when setting up or trying to adjust a budget is to track your expenses for an entire month.
Adjust Your Budget – If you are falling behind every month, take a look at your budget and see where you can make cuts, whether it’s the small expenses or a large fixed expense. If your debt is new or recently increased, add the new payment amount to your budget.
Do the Math – Look at a credit card debt calculator and find out how long paying the debt will take and how much you will pay in interest. Understand the benefits of fixed credit card payments, how to calculate your APR’s, and why making minimum payments can lead to years of financial hardships.
Interest Rates – If your interest rates are high, make sure you look into all of your options to pay back debt. Feel free to call us and let assist you with any questions you may have. Contact your credit card companies and see if you can have those interest rates lowered or look into other options. Lower interest rates will always save you money and time when paying off debt.
Pay Extra – This is, of course, easier said than done. If you have extra funds at the end of a month, send an extra payment to your creditors. Sending extra payments can go a long way towards paying off debt early and can save you even more in finance charges.
Monitor Your Progress – It’s important to monitor all of your accounts every month. Making payments is just part of the equation; you should always open your statements or check your account online. Monitoring accounts will allow you to be sure that your payments are posting and your interest rates have not increased.
Begin Planning for Next Holiday Season – It just takes a little planning. Decide how much you’ll need for gifts in 2017 and start saving now.
Paying off debt as soon as possible will relieve stress and save you money in the long-run. If you have debt or are just looking to have a better financial road map going forward give us a call. We would be happy to provide you with the financial knowledge you need to succeed. Don’t get discouraged, stick to your plan and become debt-free!