How to ensure holiday debt doesn’t hang around to gather interest.
The holidays aren’t always easy on your budget. From trying to give your family the gifts they want to all those one-off expenses that aren’t included in your regular budget, it can be hard to stay ahead so you can avoid relying on credit to get through to the New Year.
As a result, if you’re like most Americans, you end the holiday season with more credit card debt than when you started. It can be hard to rein in the debt and get your finances back under control. In the meantime, those debts are growing as interest gets added every pay cycle. So what can you do to get ahead?
Curing a Holiday Debt Hangover Finding the right cure to eliminate your holiday debt The average family of four spent around $1,007 on the holidays Without Any Cure: On a minimum payment schedule:  • It would take 61 months to pay off in-full • With total interest charges of $495.29 Cure Option No. 1: Hair of the Dog AKA Credit Card Balance Transfer Just like the idea of using a cocktail to cure a hangover, this eliminates credit card debt by opening a new credit card. Financial health benefits: • With excellent credit, 0% APR for up to 24 months • All debt consolidated on one card Potential side effects: • High transfer fees for each balance moved • Cure may not work if you have less than perfect credit Cure Option No. 2: The Caffeinated Approach AKA Debt Consolidation Loans Some overcome a hangover with caffeine. This takes the same approach – you add a simple loan to offset the burden of your credit cards. Financial health benefits: • You deal with a low-interest loan instead of high-interest credit cards • You don’t feel the pain of your credit cards since the debt is consolidated Potential side effects: • The cure doesn’t really help unless you have good credit • If you use a secured version, like a home equity loan, it can actually make your condition worse Cure Option No. 3: The Hangover Pill AKA Debt Management Program Just like a pill created by scientific experts can cure a hangover, a DMP created by financial experts can cure a debt hangover. Financial health benefits: • Your doctor (a credit counselor) prescribes a program that will work for you • Like a universal healthcare option, you don’t need good credit to use it Potential side effects: • You can’t operate with credit cards while you’re on the program • If your debts are already in default (i.e. you have chronic problems) this may not work for you  Calculated using an average of 13% APR on a standard payment schedule equal to 2% of the balance. Sources: https://nrf.com/sites/default/files/Holiday%20%231%202014_0.pdf http://www.nerdwallet.com/blog/shopping/2014/spending-cash-christmas/
Not sure how to cure your holiday debt hangover? Talk to a certified credit counselor to find the best solution for your unique financial situation.