Feeling overwhelmed by credit card bills from holiday overspending? From gifts for loved ones to the irresistible spirit of the season, it’s easy to get carried away. Here’s how to bounce back from your credit card hangover.
If you find yourself in a predicament of overspending during the holidays, don’t despair. Take a look at these expert tips to help you get back on track:
Be Kind to Yourself
“You got there the way you got there,” advises Heather Philp, senior vice president at Wells Fargo. “It’s okay to make returns and be gentle with yourself. Don’t beat yourself up over generosity gone awry.”
Create a Plan
Sit down and list out all the credit cards with debt accumulated over the last month. Determine your excess funds and set a plan for paying down the debt.
Avoid Paying Only the Minimum
High interest rates mean simply making the minimum payment won’t make a dent in your debt. Prioritize paying down the principal balance to tackle the debt more effectively.
Tackle High Interest Cards First
Start with the credit card that has the highest interest rate, as well as those with the highest balance. Maximize your payments on these cards to reduce the overall interest paid.
Utilize Extra Funds
Consider using your tax refund or year-end bonus to make a significant payment towards your credit card debt. Focus on paying down the highest interest debt to save on interest costs.
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Plan Ahead for Next Year
Learn from this year’s experience and create a deliberate plan for holiday spending next year. Set a budget and stick to it to avoid getting caught in the same situation.
Share Your Tips
How do you manage holiday spending? Share your tips in the comments below!
Rodney A. Brooks is the former deputy managing editor/Money at USA TODAY. His retirement columns appear in U.S. News & World Report and Senior Planet.com. He has written for National Geographic, The Washington Post and USA TODAY. The author of “Fixing the Racial Wealth Gap,” Brooks has testified before the U.S. Senate Special Committee on Aging. Visit his website at www.rodneyabrooks.com.
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