After the holidays, most people’s credit cards have hefty balances. It is important to understand the best way to approach debt management, especially at this time of year.  Even frugal shoppers may be overwhelmed when bills arrive in the mail. Here are some tips to recover from this holiday debt.

Never Ignore Bills

Even though it may be tempting, a person must always pay bills on time. Ignoring the situation will only make things worse.  With every late payment comes a late fee. On a worse note, late payments are often reported to a credit bureau and will end up affecting a credit score. It is vital to at least make minimum payments.

Never Add To The Debt

After the holidays, it is time to bury credit cards. Charging more purchases will make the situation get even more out of control. Adding extra to a credit card will only prolong debt. After the holidays, it is best to cut back on luxuries like expensive dinners, salon visits, and costly coffee each day. When shopping is mandatory, like at a supermarket, it is best to use cash only. Sticking to a budget is much easier when a person has limited funds at hand.

Now is the perfect time to try to put extra money toward monthly bills. In the end, less interest will be paid and the bill will be paid off sooner. Even though it may be an upfront expense, it will pay off in the end and save money.

Holiday_Debt

Combine Balances

When a person has multiple credit cards, it may mean paying more money each month than having a single credit card bill.  It is best to uncover which credit card offers the lowest interest rate and transfer other balances to the one card. It makes things easier when there is one payment instead of divided payments.

Negotiate A Better Rate

It never hurts to contract a credit card company and negotiate a better rate. Lowering interest rates is a key to debt management. If a person is paying higher than 15% in interest and a company will not concede to a lower rate, it may be better to transfer a balance to a better card.

Keep Track Of Progress

Everyone enjoys being successful. To gain motivation, it is wise to keep a record of progress toward paying down accrued debt. To help along the way, it can be fun to celebrate after reaching small milestones. For instance, after holiday debt is paid down, a special treat can be purchased. If a person owes multiple thousands on a credit card, a person can enjoy a special meal after each $1000 is paid off.

Debt management is never fun, but it is a necessary evil.  When a person is serious about paying off debt, it is key to stick to a budget and avoid unnecessary purchases. Uncovering the best interest rate and consolidating debt will make the process a bit simpler. Even though the holidays may be an expensive time of year, there are ways to manage them wisely.

Author Bio:

This guest post was provided by DebtSuccess.com, the debt management experts specializing in debt consolidation, debt relief, credit repair, tax debt, debt settlement and more.