Create a Plan to Pay it Off
There are financial penalties associated with allowing your holiday debt to move from one holiday season to the next like 29% of Americans. If you opt to make the minimum payments of $25 per month on a $1,000 debt it will take you until 2023 to eliminate that debt. I recommend that you tackle the debt simply by breaking down the payments. For instance, if you owe $1,000 in credit card debt, opt to pay off the debt in 3 months by making payments of $333. If a single payment feels financially frustrating, break the payment into two bi-weekly payments of $166.
Don’t Delay The Debt
You don’t have to wait until you get your credit card bills to start making payments, In fact, the more frequently you make payments, the less interest you’ll end up paying and the more quickly you’ll be paid off.
Target The High-Interest Rates First
While you may feel money motivated to eliminate a few small debts with smaller balances first. It is most financially beneficial to eliminate the debt with the higher interest rates first as higher interest rate cards will cost you more money over time.
Cut The Budget
To pay off your holiday debt quickly, take a look at what you might be able to live without for a few months. You could cancel some subscription services, eliminate eating out and make coffee at home to free up some cash. And you may find that even after your debts are paid off, you may not miss what you cut back on.
Minimize Costs You Can’t Cut
You can’t eliminate all of your monthly expenses, but there are plenty you can reduce. For example, you can cut your phone bill and cable bills.
Lower Your Interest Rate
The lower your interest rate on your credit cards, the less you’ll have to pay on top of your balances. Call the company and let them know that you’ve been shopping around for a better rate with you for a lower rate, which will allow you to pay off more quickly.”
You might be able to eliminate interest on your credit card debt altogether if you take advantage of a zero percent balance-transfer offer and pay off what you owe during the period when the low-to-no interest rate applies. Watch out for balance transfer fees, though.
Cut The Card
If you want to pay off holiday debt quickly, you have to avoid racking up more debt. Not only can using cash help reduce your reliance on credit but also it might help reduce your overall spending. After all, the Consumer credit card debt now stands at $808 billion.