Tips to Pummel That Looming Holiday Debt

by Scott Sery on February 13, 2013

credit cardMore than a month has passed since we had a mad rush of gifts, eggnog, turkey and in-laws.  Through the month of January many people have been furtively glancing at their credit card balance hoping it would magically go down.  Since we are halfway through February, the realization has set in that if something is not done fast these debts will loom over us for quite a while.  If you have racked up a lot of debt on your credit card(s), now is the time to make sure you can get them under control.

Make a List

Like all debt, the first step is to start by tallying up what you owe.  Personally I prefer to use a spreadsheet so I can easily modify and track my progress.  Knowing what you owe is the first step to getting your debts under control.  On your spreadsheet you should put the most expensive debt (that with the highest interest rate) at the top, and the least expensive (that with the lowest interest rate) at the bottom.

Stop Adding to Your Debt

If you have not put away the credit card, do it right now.  From here on out (until the debt is under control) cash only is the way to go.  It is simply too hard for most people to get out of debt while they keep adding more debt to the pile.

Negotiate Your Interest Rates

Call your credit card company.  First tell them that you have a plan to get your card balance down to zero in the next few months.  Explain that if they can drop your interest rate down to 0% for 3 months you will be back to using the card sooner.  If they say no, explain that “such and such company offers a 0% balance transfer.”  Still no?  Ask to speak with a supervisor who has the authority to make that decision.

Combine Your Debts

If your credit card company is being stubborn, or if you have a number of smaller debts (especially if they have a high interest rate) consider transferring them onto a 0% balance transfer card.  These cards usually have a great introductory rate (0%), but if the balance is not paid off within the introductory period (usually 12 months) you will owe all the back interest.  So make sure your plan is to pay everything off in the allotted time.

Be a Miser

Do you remember the miser for a month tips?  Did you take part?  Can you do it again?  Slash your expenses for the next two months, and work the weekends to earn extra money.  Nearly everyone can wash cars, shovel snow, mow lawns, or clean bathrooms.  Do what it takes to earn the extra money to get rid of that debt.

Start at the Top

Now that you have your rates as low as possible, and as much money coming in as possible, start at the top of your list of debts.  Pay as much as you possibly can on the most expensive loan, and pay the minimums on the rest of them.  After the top loan is gone, move on to the next.  As a motivator, print your list and physically cross the debt off as it is wiped out.

Most people hate debt. Having debt because you splurged on the holidays is a bittersweet feeling.  Take the next month or two and pummel it.  There is no reason you cannot earn extra money on the weekends while skipping eating out and canceling cable television in order to wipe the debt out sooner and save yourself a lot of money on interest charges.  Better yet, be a miser for an extra month and prevent holiday debt next season.

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Scott Sery

Scott Sery is a native to Billings, Montana. Within an hour in nearly any direction he can be found fishing, hunting, backpacking, caving, and rock or ice climbing. With an extensive knowledge of the finance and insurance world, Scott loves to write personal finance articles. When not talking money, he enjoys passing on his knowledge of the back country, or how to live sustainably. You can learn more about Scott on his website Sery Content Development
  • moneybulldog

    Great tips on the credit card front Sean. If you have the option it’s definately worth looking for a 0% bance transfer as long as you have the dicipline to not spend on the old cards again after you’ve made the transfer.

  • Jose

    We did it right for the 2012 holiday season. Even though I had the cash (carefully budget) to pay for all of our gifts, I went ahead and used a “points” credit card to make most of our holiday purchases. I just paid it all off in January and have a bunch of points I can use now 😀

    • I put almost all of my purchases on a rewards credit card. There is no reason not to be able to get something back in return for purchases that you make.

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