Now that we’ve stepped into January and we’ve crossed about half the month, majority of the Americans must be busy nursing their holiday debt hangover, as per a new survey. The survey included 1,148 adults and it was found out that more than 1 among 4 (28%) Americans said that they’re planning to accumulate debt soon after the holiday season during December. Among this 28%, two-thirds of them assured that they would probably need 3 months to get out of debt and retain normalcy. With the shopping season being extremely busy, it is tough enough to succumb to the temptation of buying everything on which you set your eyes.
Now that the holidays are over and you’re worrying about how you can get back a firm grip on your finances, you must be in desperate hunt for the ways in which you can combat holiday debt once and for all. For all the spendthrift Americans, who charged extra on their credit cards, so much so that they now find it impossible to repay, here are few essential tips to accomplish your objective sooner. Check them out.
Watch out for an affordable and reasonable interest rate
There are ample offers of transferring your high interest debt into a low interest new credit card but before you try to leverage this debt relief option, ensure crunching the numbers so that you actually know whether or not you’ll be saving money at the end of the deal. Check out the present interest rates so that you can figure out the amount that you will spend on paying off the interest rates over a span of 12 to 24 months. Next you have to measure in contrast the cost as against the balance transfer credit card so that you know the exact amount that you would ultimately save.
If possible, you should watch out for the 0% offer which lasts for a certain period of time, called the introductory period. You can transfer the entire high interest balance to the new balance transfer card so as to reap the benefits of the 0% introductory rate. However, before you opt for transferring balances from one card to another, you should call your present company to check whether or not they can offer you a lower rate so that you can ward off the possibility of transferring balances.
Follow a strategy for repaying multiple debts at the same time
Majority of the Americans carry multiple credit cards and this is perhaps the biggest financial blunder that they commit while dealing with credit cards at the first place. This leads up to the query about how you should divide your payments among multiple credit cards. As per what financial analysts say, the most rational thing that you should do is to repay the credit card which has the highest rate. Unfortunately, debtors often do the opposite as they begin with the account which has the lowest interest rate. They say that they feel extremely motivated by repaying the cards one after another.
Cut back on your budget and save a few dollars here and there
When you can cut down on recently made expenses so as to devote more funds towards repaying debt, you can benefit a lot but this feat is pretty tough to execute. Hence a worthy initial step is to design a monthly budget with all sorts of details and though this may sound painful enough, you can ultimately reap advantages from this new habit. Curb all those frivolous expenses like the daily latte that you have at the cafe or the weekend night-outs and dine-outs that you plan. Also take into account some bigger items like transportation and housing.
Send payments towards your debt through the entire month
There are many credit card users who tend to believe in the wrong notion that companies won’t accept more than 1 payment in a month. Since the interest rate is determined from the average regular balance in your account, you will have to pay less at once when you keep making continuous payments throughout the month. Whenever you think you have saved few dollars, you can send them to the credit card company before spending it elsewhere.
Look for ways to make passive income
Only focusing on reducing your expenditure is similar to losing weight without the right diet or exercise. You can watch out for new jobs that you can try from home after completing your day job. If you have a skill of writing, you can become a work-from-home content writer where you can earn money per post and help yourself in making more funds.
Debt is never a good thing to bear and more so when it is holiday debt, it has to go within maximum 3 months. So, follow the above mentioned debt repayment strategies that can help you get back on track.