What’s a surefire way to kill that Happy New Year spirit? By looking at all of the card debt you racked up shopping for holiday gifts. but with a little planning, you can vanquish that debt long before you have to worry about holiday spending again. here are five tips to help you achieve that goal:
1. Step away from the credit cards
It’s much harder to get rid of that holiday debt when you keep adding to it. so take most (or all) of your credit cards out of your wallet or purse and put them in a drawer or other safe place. that way, you’ll be much less likely to make impulsive or unnecessary charges on them and run up your balances even more.
2. go above and beyond just enough
Many people have conditioned themselves to make the minimum payment on each card every time a bill comes due. but if you want to really pay off those holiday charges, then you have to get ahead of the curve. that means paying more than the minimum amount due – even two or three times more if you can.
3. find a way to reduce your APR
The higher the annual percentage rate on your cards, the more interest charges you will pay. so it makes sense to try to get that rate as low as possible. how do you do that? Try to negotiate with your credit card company for a lower rate. Or find a great deal on a new credit card (they’re all over the place) that gives you a low (or zero) introductory APR and then transfer your holiday balances to that card.
4. Redistribute your finances
In order to eliminate that holiday debt, you’re going to have to alter your monthly disbursements. obviously, that means cracking down on luxury or discretionary spending. but you should also consider foregoing stashing money in a savings account for awhile and channel those funds toward paying off your credit card debt. If you have more than one credit card, a good strategy would be to pay the minimum amounts each month on all but one card – and then pay off the balance on the chosen card as quickly as possible (and then repeat the process with your other cards if needed).
5. Look for savings or other revenue
Stretching your dollar is easier said then done. but you can lower your fixed costs by cancelling services you don’t use (like gym memberships or premium TV channels). Limit your financial splurging to discounted events offered through Groupon, LivingSocial, or similar sites. you could even find a way to get a temporary income boost by being a snow shoveler, server at a Super Bowl party, or a flower delivery person for Valentine’s Day. And there’s no rule that says you can’t return unwanted gifts for store credit