The holiday shopping has ended, you’ve cleaned up the wrapping paper, and now it’s time to face the music – or, rather, the bills – and try to recover from the holiday spending.
Rest assured, if you used credit cards in the past couple months, you’re not alone. According to a survey from CreditDonkey, 37 percent of people said they use credit cards to finance their holiday spending. Whether you charged a small or large amount, now is the time to get out from under that debt and move on with your financial plans.
Here are tips to help you in recovering from holiday spending.
Start with the Highest Interest Rate
If you used more than one credit card this season, then you’ll want to focus on paying off the one with the highest interest rate first. This way, you can avoid as much interest as possible while you pay down the debt. As you put most of your payments toward the higher interest card, pay the minimum on the other cards. Once you are done with the first card, move on to the next until you are paid off in full.
Consider Transferring Your Balance
If you went a bit overboard and you won’t be able to pay off your debt anytime soon, then consider transferring your credit card balances to a card with a 0% APR period. This way, you can pay off your balance over a longer period, without accruing interest along the way. You’ll want to check on the terms of different credit card offers, as each makes different allowances, such as transfer fees, APR periods, and the ongoing APR.
Limit Unnecessary Spending
Aside from the costs of housing, transportation, utilities and food, be sure you’re not building additional expenses into the mix. You’ll need that extra cash to recover from your holiday spending. Instead of fancy dinners and weekend shopping trips, consider staying in and renting a movie, cooking with friends, or playing board games with a group.
Recovering from holiday spending may take a little work on your part, but with discipline and a big picture view of what you want to accomplish, you can set realistic goals for the New Year.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.