Posted by ryan on 23/12/08 at 12.00pm
It is not unusual for people to overspend their budget in December during the Christmas and holiday shopping season. When your credit card bill comes in January, you may be in shock and it’s very possible that the bill is more than you can afford to pay off.
At Credit Card Matcher, we will always tell you to never spend more money on your credit card then you can afford to pay off at the end of the month. Using a credit card responsibly is just that: only use a credit card to spend within your means. However, we can completely understand if you overspend in December, even with those coupons and discount vouchers. And the good news is that so long as you are disciplined the other 11 months, there is a straightforward way to eliminate your Christmas shopping debt.
Here’s the three step plan:
A 12 month balance transfer card at 0% interest will allow you to pay off your holiday shopping credit card bill over 12 months, making it much more manageable. And the good news is that you won’t have to pay interest during this time.
2. Divide your holiday debt into 11 parts
You might think 12 makes more sense, but you want to have the debt paid off by November of the following year so that you are completely debt free by the next holiday shopping season. So let’s say that you have $2000 in Christmas shopping bills that you can’t pay off right away. Divide that by 11 and you get approximately $182 (always round up).
3. Send in 11 monthly payments and make sure they get in on time!
Take the amount you calculated above and just send that amount in each month. You may need to cut back a little on your other expenses during the year to make room for the amount you need to pay off, but that’s ok. It’s important that you stay disciplined and make this a priority. If you make the calculated payment each month for 11 months, you’ll be completely free of holiday shopping debt by next Christmas. And by splitting the payments up by 11, it is a very manageable plan.
So that’s a our tip for paying off Christmas & Holiday credit card debt. We hope it helps take away some stress in a season that is meant to be joyful!