Paying Off Holiday Credit Card Debt
Now that the exchanging of gifts are done, most Americans are saying their wallets are feeling a lot thinner. According to MagnifyMoney.com, consumers spent more money this year on gifts this holiday than last year. Study showed that roughly fifty-one percent of people did not set a budget and those who did, over fifteen percent of those consumers ignored their budgets and over spent. More than forty percent of consumers stated they do not think they can afford to pay off their credit card bills now that they shopping sprees are over. Y2K is here to inform you of a few tips you can use to eliminate your credit card debt.
First things first is setting yourself a deadline. Having a timeline in mind for when you would like to have the debt paid off can help you figure out how much you’ll need to pay toward the cards each month. For example if you have $2,000 in credit card debt and set a deadline of being debt free by April, you know you’ll need to pay at least $500 a month, depending on your interest rate.
Once you decide how much you can afford to pay toward each card every month, make sure you set the plan on automatic debit. Making the payments automatic makes it more difficult to be late or to forget to submit the payment.
Another suggestion is extra cash. If you are receiving a year-end bonus or are you expecting a tax refund in the next couple of months? Use those bonuses to make large payments on your debt. Don’t look at these things as free money to spend instead use them to pay down debt and boost your credit score.
If you feel as if you’re in over your head with these credit card debts and need help figuring out a plan, give our office a call to schedule a free consultation. One of our agents will be happy to advise you and help clear up any confusion you may have. Start this New Year off on the right foot!
Monthly Tip: Besides just paying your bills on time and watching your balances, there are two additional categories that affect your credit scores. Those categories are, length of credit history and types of credit which determines ten percent of your credit score. These will affect your score over time. When preparing to purchase a home, you need to review your “credit mix”. A combination of revolving credit (credit cards) and installment credit (auto loan, line of credit, etc.), over time, will help build positive scores. Adding a mortgage with help diversify your “credit mix”.