Tackling debt after holiday shopping
WILLARDS, Md. – With the holidays over and people heading back to work, reality is starting to set in. For some of us, reality also means facing credit card bills from all that holiday shopping. But there are things you can do to make that debt a little more manageable.
“Most people finance their Christmas presents through credit card debt,” says Chris Davis, the President of the Farmers Bank of Willards.
According to Magnify Money’s annual post-holiday debt survey, 70 percent of Americans used credit cards to shop for gifts this year, with an average debt of $1,325. But now many consumers are left scrounging up every penny to pay their bills.
“The very first thing is stop digging the hole deeper. Don’t go out for the after Christmas sales and charge up more,” says Davis.
Experts tell 47 ABC, in order to start paying your debts off, you have to know what you’re starting with. “Organize the debt that they have. Understand that you have to get your financial statements or monthly statements, write it all down on a piece of paper,” says Davis.
Next, find your highest interest rate and start paying that bill first. “When you pay that debt off first, take the money you were paying on that debt and put it on the other debt till you can snowball it till you get down to zero,” says Davis.
You can also transfer your higher interest rate debt and put it on cards with lower interest rates. “But if you do that, make sure you understand how soon you have to pay that off,” says Davis.
Overall, experts recommend creating a detailed written plan in order to tackle any financial goals. Experts also tell 47 ABC, make sure you make a payment every month on something. If you can pay more than the minimum payment you should, even if it means you have to cut back on other aspects of your life.
Another tip is to create a detailed budget for the holidays as soon as you can so you’ll have enough time to save money in advance. If you’re ever unsure of where to start, talk to your bank or a financial adviser.
