It is undoubtedly true that the holiday season is always a great time to spend with your friends and family members. As we’ve stepped into 2014, all the celebrations are behind us now and decorations have been put away. We’ve all made our New Year resolutions and are feeling good and then comes the credit card bill in our statement to snatch away all the fun. Before you exclaim “Ugh”, you will realize that you had got a little too carried away this winter. If you’re someone who has been facing a bevy of new credit card balances, you can certainly resolve to do better next year. But what steps should you take now in order to fight against your holiday debt hangover? Check them out in case you’re unaware of them.
- Don’t skip while making payments: You might think that it’s okay to skip a single monthly payment here and there during the post-holiday lull but the fact is that missed payments hurt your credit score in the worst possible way. Not only will you be stung with a hefty late fee and penalty fee, but your credit rating will also suffer a lot. Creditors will charge off your debt amount after repeated missed payments and this will probably be the ultimate hit to your credit rating. So, keep a tab on your due dates so that you don’t miss the dates.
- Freeze all your additional charges: As your financial boat is already riding low, you should not add weight to it. Stop charging with credit cards, whatsoever might be the situation. The more you shop with your credit cards, the higher will be the debt amount that you’ll accumulate, and when you’re going through a situation where you’re trying to combat your holiday debts. Avoid all sources of temptation too.
- Turn some unwanted gifts into cash: You may even return some of your unwanted gifts before the store time limit runs out, as the sooner you go to return, the higher will be the chances of getting back cash. Did you have any idea about the fact that it is possible to sell unwanted gift cards in exchange of cash? There are a few reputable websites that are easily found online doing this.
- Transfer your balances to a low rate card: Combining your debt at a low-interest rate is yet another way in which you can fight your holiday debt hangover. You just have to shop around and get multiple quotes from the companies and choose a card that offers nominal rates for a longer period of time. You need to transfer the total amount of high interest debt into the new card before the end of the introductory period so that you can reap the benefits of low rates and low monthly payments.
- Don’t raid your retirement savings: Yes, your holiday debt might be hanging over your head but that doesn’t mean that you have to raid your retirement savings. If you’ve saved enough money into your retirement savings account, you need to make sure that you withdraw these funds only after retiring. If you withdraw funds before reaching your retirement age, you will be subject to penalties. You can take resort to the other debt relief options through which you can make timely payments to repay your debt.
Therefore, when you’re wondering about the ways in which you can survive the holiday debt hangover, you have to adopt certain frugal living tips to brace your finances. Follow the ones mentioned above, along with adopting a financially disciplined lifestyle.Google+