Tips For Paying Off Holiday Debt Faster
Sometimes the holiday season can drain us financially. Even when we have a budget for holiday purchases, it’s easy to lose track of spending when you are buying so many gifts or entertaining a large crowd – especially with everything being more expensive these days.
Here are some tips for helping you get rid of that debt faster.
Pay more than your minimum monthly payment
Depending on how much you owe, the minimum payment on your credit cards might only cover the monthly interest charge. You’re never actually eliminating the principal debt. Pay as much as you possibly can each month until those credit cards are paid off. If that means skipping the local coffee shop a few days a week, or brown bagging it for a while, those are temporary sacrifices you can reward yourself with again when the cards are paid off.
Transfer your credit card balances
Transferring your debt to more affordable cards can save you hundreds or even thousands of dollars. If the rates on your current credit card(s) are 15% or higher (and most credit cards are), transfer what you owe to a credit card with a lower rate. Our balance transfer rate is only 5.90% APR and is good until you pay off that balance. That’s different from most cards, which often charge balance transfer fees and limit how long you have to pay off the balance. Transferring your balances could lower your debt considerably and help you pay off your cards faster.
Use the snowball effect
If you owe money on multiple cards, pay off the card with the smallest balance first. Once paid off, take the money you were paying on that card and add that to your monthly payment on the card with next smallest balance. If your payment on that card you paid off was $20 a month, and the payment on the next card is $15, you’ll now pay $35 a month to that next card. Keep doing that until all balances are paid in full.
It takes some discipline to pay down your debt. Stay the course and your debt will be gone faster than expected.
