How do I pay off my holiday credit cards?

Admit it. Your holidays were a huge success – the new decorations were perfect, the celebratory feast included all the trimmings and everyone got just what they wanted. But now that the holidays are over, your credit card is begging for mercy! Don’t worry – you can pay off your credit card – but you need to start now and think creatively. Here are a few helpful tips to help you pay off your credit card bills in record time:

Consolidate or transfer your balance: Take advantage of a lower interest rate
If you have multiple credit cards or an account with a high interest rate, you may want to consider consolidating and/or transferring your existing balance(s) to a new card with a lower interest rate. There are a variety of credit card deals out there, so shop around and see what offers are available. However, pay particular attention to all of the terms and conditions of the new card to make sure there are no strings attached or hidden fees. (To learn more, read: Finding the best credit card deals.)

Maximize your payments: Create a budget
The best way to pay off your credit card is to maximize your monthly payments. Creating a simple budget can provide you with insight as to where you can cut costs in your everyday and monthly expenses, freeing up cash to put towards your credit card bill. (To learn easy ways to cut costs, click here.) If you need help setting up a budget, there are several different computer applications available that can guide you through the process.

Don’t add fuel to the fire: Use cash
Although using a credit card may be the easiest way to shop for groceries, go out to lunch or pay for gas, it may not be the smartest option when your balance is already higher than normal. Instead, consider using cash or at least a debit card as a means of limiting your spending and keeping a handle on your credit card bill.

Try to lower your current rate: Negotiate with your credit card provider
Believe it or not, a lower credit card interest rate could be only a phone call away. That’s right, your current credit card provider may be willing to work with you to lower your interest rate. This could not only help you now, but in the future as well. It’s as simple as phoning your credit card company and asking what they can do.

Use your rainy day fund: Cash out your holiday bonus, tax return or emergency money
We know – you had it all planned. That holiday bonus, tax return or rainy day fund was supposed to be a trip to the Bahamas or a new flat screen TV. However, with a looming credit card balance that is growing by the second, you may want to rethink that vacation or big ticket item and use your extra savings to pay off your credit card.

Dust off that DVD collection: Sell or return what you don’t need
You know that iPod you haven’t used in six months or that sewing machine you just can’t figure out – sell or return them. Doing this can not only earn you a little extra cash, but can also help you get organized and free yourself (and your home) of extra stuff you don’t use. Check out online auctions, local consignment shops or newspaper classifieds to learn more about personal sells. Just remember, if you are selling items for a profit, the Internal Revenue Service may want to know about it depending on the amount made, as your earnings are considered a taxable source of income.

Lesson learned: It’s easy to get caught up in the holiday spirit. Use these tips to pay off your credit card bill before it becomes a long-term financial burden. And, when next December rolls around, consider using cash or a debit card instead of your credit cards. Your wallet will thank you.


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