The holidays have passed, the lights are coming down and the wrapping paper is thrown away but the one thing that remains is your empty wallet. Now it’s December 26 and you have a ton of debt racked up from all the traveling and gift buying you did over the last couple of months. While that bottom line at the end of your credit card statement may seem daunting now, follow these tips on how to take care of your holiday debt before it gets out of hand.
Make Another List
Just like you did before the holidays, make a list. This time, instead of listing out who and what to buy, decide which debts need to be paid off first. The first card to pay off is the one with the highest interest rate. After that, just start going up. Some people prefer to start with the smallest debt first, working up to the largest until it’s all paid. Both are good methods, but be mindful of the high interest rates when planning.
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Use Tax Rebate and/or the Holiday Bonus
It’s certainly not the most fun way to spend something as refreshing as your tax rebate, but using it to pay off holiday debt could lead you to a more comfortable financial situation down the road. In addition to your tax rebate, if you’re lucky enough to have received one, use your holiday bonus to get a jump on paying off your credit cards or getting your savings back to normal. It may be a sacrifice now, but it’s one that can really benefit you as the year goes on.
Sell Unused Possessions and Alter Saving Habits
It might finally be time to do something with that old guitar you never learned to play. Or the multitude of other Christmas presents that have been collecting dust over the years. One way to reduce debt accrued during the holidays is to sell some items you rarely, if ever, use. With websites like Craigslist and eBay, it’s easier than ever to sell items for which you have no need. Not only are you getting a jump on spring cleaning, but you’re also setting yourself up to pay down your holiday debt quicker. Along with this, be sure to alter your saving habits. This can be anything from not buying coffee every day to switching to a credit union.
What NOT to Do to Get Out of Holiday Debt
While there are many ways to get out of your holiday debt, there are a few methods we would recommend staying away from:
- Dip Into Retirement Savings – Don’t put the burden of something as temporary as holiday loans on your future self. Leave your retirement savings alone.
- Taking Out a Payday Loan – Again, this is just making the future a little more difficult by putting yourself deeper in debt.
- Transferring Balances – Transferring balances can lead to higher interest rates. Pay off each card separately.
Let Metro North Federal Credit Union Help You!
Along with the tips mentioned above, let Metro North Federal Credit Union help you pay down your holiday debt this year. With our professional expertise you’ll be able to get your debt repayment going in the right direction. Though the holidays may be over, give yourself one final present and contact us at 248-634-9061 to schedule an appointment, today!