One thing is for sure—credit card debt is almost never low-interest. Yet, when the holidays roll around, many of us turn to credit cards for gift-giving—pushing us to uncontrolled expenses that may lead to poor financial decisions. However, you can turn to debt relief services for help.
One report recently revealed that the average American buys $1,000 worth of gifts during the holiday season. Most of the time, that means using credit cards, often at very high-interest rates, making it difficult to pay off once the holiday cheer has passed.
This is especially true when you’re already struggling to pay other types of debt like auto loans or student loans. Whatever your particular circumstances are, the good news is there are plenty of ways to get out of holiday debt.
In this article, we’ll cover some tips on how you can avoid financial trouble by managing your Christmas debt more effectively. From debt relief services to budgeting, we’ve got you covered here.
3 Tips on How to Avoid Christmas Debt
Of course, the best way to steer clear of financial trouble this Christmas is to plan. Creating a holiday budget is part of this.
Let’s look at these three tips on how to avoid Christmas debt in 2022:
Start Christmas Shopping Early
A highly effective method for preventing your holiday debt from spiraling out of control is shopping early. Instead of buying all of the gifts in one giant rush just before it’s time to give them, spread the purchases across the year.
For people with less stable income, such as commissioned salespeople and seasonal business owners, this can be one of the best ways to reduce the stress that comes with Christmas debt.
Make a Christmas Gifts List
Any good plan includes a list of some sort, and that definitely holds true for Christmas shopping. Try creating a gift list for everyone you plan on buying for. This is especially helpful for those that prefer buying gifts throughout the course of the year instead of all at once.
It’s also a good way to avoid making impulse gift purchases, which can be a huge temptation when amazing deals are being advertised everywhere.
Although it’s nice to save money, it shouldn’t come at the cost of high-interest debt, which can totally offset the amount you saved on the purchase.
Create a Christmas Budget and Stick to It
Perhaps the best way to avoid holiday debt is to create a Christmas budget that you strictly follow. Working from the list of the people you plan on buying gifts for, set an amount you want to spend for each one.
Once you see the total, you might need to make some revisions to hit your target total spend. This is essential for keeping track of spending and staying on course when you have numerous people to buy gifts for this Christmas.
A budget also helps you stay financially focused when faced with a flood of discount offers in your email inbox.
How to Handle a High Credit Card Balance
If you’ve already racked up high balances on your credit cards for buying gifts, never fear—there are methods to bringing them back down.
Let’s take a look at some ways you can get relief from Christmas debt after the holidays are over.
Pay More than the Minimum Payments
An essential principle of paying off credit cards is how interest is charged by lenders. Credit cards are revolving accounts, which means every month, you’re charged interest on whatever your balance is at the end of the billing cycle.
Let’s say you’ve got a $500 balance, this would result in $26 in interest charges. The next month, if you add to the balance instead of paying it down, you’ll get charged interest on the prior month’s $26 interest charge. This cycle repeats month after month, compounding the interest you actually pay on the debt.
Because credit cards revolve around debts, it’s crucial to pay more than the minimum payment each month. The minimum payment only covers the interest plus a tiny sliver of your balance, making it nearly impossible to pay off the debt in a reasonable amount of time.
Transfer to a Card With a Low-Interest Rate
Another solid method for avoiding Christmas debt that lingers all year is transferring the balances to a card with a low-interest rate. Sometimes you can even find offers for zero interest for an introductory period.
By reducing the interest you’re being charged each month, more of your payment goes to paying off the debt rather than the credit card company’s profits.
Saving Money with Debt Relief Services
Sometimes things happen, and finances tighten—making it difficult to dig your way out of credit card debt from Christmas purchases. In these situations, you can get help from a company like Alleviate Financial Solutions.
We specialize in debt relief services and have expert financial analysts who have seen nearly every type of situation. This experience gives you the insight needed to craft a debt relief plan that fits the goals you have for your financial future.
There are a few possibilities of which debt relief strategy will work best for you. If your financial situation is particularly dire, one route you might take is debt settlement, which can drastically reduce your balances in only a few years.
Another option that could work for you is a debt consolidation loan, which rolls high-interest debts from Christmas past into a single payment that you can afford. There’s also the possibility that a simple debt management program could provide the relief you need from your financial holiday hangover.
Whichever route is right for you, Alleviate Financial Solutions can help you make an informed choice.
Do You Need Debt Relief Services?
Following these tips, this holiday season can help you avoid debt and get yourself out of it. If you’ve already realized a need to reduce your credit card debt, you can find debt relief services at Alleviate Financial Solutions.
Our debt specialists can help you figure out the most effective and time-efficient method to reduce your Christmas debt. To learn how you can reduce your credit card bills in less time, contact us at 800-308-2935 at Alleviate Financial Solutions today!