Here are 3 ways to pay off your holiday debt:
For better or worse, the holidays have come and gone. Now that consumers are back to their usual day-to-day reality, they might be feeling the punch from their holiday spending.that consumers planned to spend a total of $1,048 on average for holiday items, such as decorations, and gifts for family and friends. Those who weren’t prepared to make those major purchases may have reached for a credit card to cover the bill—and now may be trying to figure out how to manage the debt.
The snowball method is intended to encourage individuals as they proceed with their debt payoff. Paying smaller balances in full happens much faster than, say, attacking the large balances first. If you’re someone who feels anxious or like you’re drowning in debt, the snowball method can give you the motivation you need to reduce your debt.
Another downside of balance transfer cards is that they often come with a balance transfer fee, meaning they charge a certain percent of the amount transferred. If you get approved for a balance transfer card with a $5,000 limit, you may not be able to transfer exactly $5,000 onto it; you’ll only be able to transfer $5,000 minus the balance transfer fee.If your holiday spending really went off the rails this season, consolidating the debt with a personal loan could be beneficial.
Consider this: Say you have a $7,000 balance on a credit card with a 15% interest rate. If you were to pay $250 per month to that card, you would pay it off in 2.83 years with $1,500 in interest paid. If you were to consolidate that debt with a personal loan that has a 4% interest rate and three-year term, your monthly payment would be less and you would only pay $440 in interest over the three years.
is a popular choice. This app includes a countdown until Christmas and will alert you if you’ve overspent on a particular recipient’s gift.After building a budget, starting to save as soon as possible will make things less stressful when you’re ready to start shopping.
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