According to one recent study, one-third of all Americans went over budget with their holiday spending. If you count yourself among that crowd, it’s time to start hammering away at that debt. Here are some simple ways to pay down your holiday debt.
The first step to reducing debt is finding “extra” money to send its way.
- Look at your current monthly expenses and see where you can cut back.
- Ask yourself what services you can cancel.
- Look for better deals on expenses you can’t cancel.
- Search for ways to reduce your expenses in the future.
Once you have some money freed up, funnel it to your debts.
Check for a Transfer
If you have a lot of credit card debt, you may look at transferring to a low-interest credit card. These cards can be helpful because they come with either low interest or zero interest for an introductory period. When shopping for a balance transfer card, consider the following factors:
Transfer fee. Make sure the balance transfer is low. Usually it’s about 3 percent of your total transfer.
Introductory period. Most balance transfer cards offer their low interest deal for anywhere between six and 24 months. Do the math so that you know you can pay off the debt within that time frame.
Interest rate. Be aware of the interest rate after the intro period ends.
The best way to attack credit card debt is what’s commonly called the “avalanche method.” You target the card with the highest interest rate first, then work your way down from there. This method will save you money on interest.