The holidays are full of anticipation and excitement, but it’s no secret that they can also be one of the most expensive times of the year.
In the months following the holiday season, your finances may be hurting. With spring and summer just around the corner, you may want to pay off your credit card debt in order to afford fun activities during these upcoming seasons.
Try not to let your credit card debt get you down! We’re going to share strategic ways you can tackle your debt and get you back on track.
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Here’s how to pay off your credit card debt after the holidays:
Use Cash Instead of Credit
One of the most effective ways to reduce your credit card debt is to avoid adding to it. You can’t dig yourself out of a hole if you keep throwing dirt in! Instead of using your credit card after the holidays, make purchases with cash.
It’s now easier than ever to tap or swipe your credit card, or even flash your phone to make a purchase – the concept of money just doesn’t feel as real. Whereas when you have cash in your wallet, it is more tangible. Psychological studies have shown that you experience more mental pain when you must dole out cash to make a purchase.1 This leads people to spend less with cash than with their credit card.
Pay More than the Minimum
If you only pay the minimum amount due on your credit card bill each month then it will take longer to pay off your overall debt. It may seem great to have that money in your pocket, but by the time you pay it all back it will be far more than the initial amount owed because of the accumulated interest.
On the months you can afford to, consider paying more than the minimum amount. When it comes to just how much more – the more the better. This will help you to be more aggressive in paying down your debt and help your credit score.
Target One Debt at a Time
It may be overwhelming to pay down debt if you used multiple credit cards over the holidays to make purchases. But keep it simple – the best approach is to target one debt at a time.
Start by choosing the credit card with the highest interest rate first. Since time combined with interest put you at a disadvantage, by prioritizing paying off this card first, you end up paying less in interest over time. After you’ve targeted this debt you can work on paying down the other credit cards and soon enough, you’ll be debt-free!
Receive Gifts, Sell Old Stuff
The new gifts you get during the holidays can be exciting! Whether it’s new makeup products to experiment with, or that tech device you’ve been eyeing, there’s no question that gifts add to the season. But how do you make space for your new stuff when you still have tons of old items in your home?
A great way to address any clutter and reduce credit card debt is by selling your old stuff. Look around your home; are there things you haven’t used in a while, that you wouldn’t miss much? Like Japanese organization expert Marie Kondo says, if you hold it and it doesn’t spark joy, maybe it’s time for you to let it go.
Here are some websites and apps where you can post your old stuff to sell:
- Kijiji
- Varage
- Ebay
- Facebook Marketplace
- Poshmark
Proactive Prevention: Choose a credit card with a lower interest rate
To prepare for next year’s holiday season, ensure you shop around for the right credit card now. Find credit cards that have a low interest rate, so you can reduce the risk of burdening yourself with credit card debt that costs you more to pay down.
Paying off your credit card debt after the holidays doesn’t have to be as challenging as you think. Follow our advice to tackle your holiday debt. Another way to take care of financial planning and get peace of mind is by investing in a life insurance plan to protect your loved ones’ financial futures.
