By: Stella Katsipoutis
The holidays are over, the gifts under the tree have all been unwrapped, the parties have come to an end … and your credit cards are maxed out. What do you do now? It’s not unusual to be faced with a significant amount of credit card debt after the holidays, especially since most people use plastic to pay for the ever-increasing expenses associated with the season—including gifts, food, travel and more. If your bills are stacking up and you’re not sure how to tackle them, try these three strategies for managing post-holiday credit card debt:
When it comes to paying off more than one credit card at once, there are different schools of thought as to whether you should focus on paying the higher or lower balances first. Some say to start with your larger balances because they accrue more interest, and paying them off early could help you avoid some of that interest. Others, however, believe that paying the smaller balances is a better motivator, as it allows you to set smaller, achievable goals and gradually work your way up to paying off larger debts. The truth is that no matter what approach you take, your debt will be reduced as long as you are making payments that are large enough to cover your current month’s new spending and the interest charges, so as to make sure you continually reduce the balance. Choose the strategy that works best for your lifestyle and go for it.
Different credit card companies charge different interest rates—some higher than others. If you used multiple credit cards for your holiday shopping, consolidating your debt by transferring your balances to one lower-rate credit card can help you save money in interest. VyStar Credit Union prides itself in offering competitive balance transfer rates to qualified members. Another advantage of balance transfers is that they make it easier to keep track of what you owe, since you only receive one monthly bill versus juggling multiple statements. Call us today at (904) 777-6000 or 1 (800) 445-6289 to see if a balance transfer is the right option for you.
Simply paying the minimum amount due on your statement will only result in higher interest payments, more debt, and more time spent paying it all off. If you want your credit card balance to shrink rather than grow, you’ll have to pay a little something extra when you receive your statement. The more money you can pay above the minimum amount due, the more money you’ll save—and the sooner you’ll be debt-free.
If you are struggling to pay off debt after the holidays, or at any time of the year, VyStar’s Money Makeover coaches are here to help. For more information, please visit your local VyStar branch, or call us at (904) 777-6000 or 1 (800) 445-6289.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.