Dealing With Holiday Credit Card Debt

During the 2011 holiday season, Americans were predicted to spend over $600 each on gifts. And that money spent on gifts is just one portion of holiday spending; many people also have increased costs for food, entertaining, holiday décor and travel. All these expenses can add up, and the bill for those holiday expenses charged on a credit card will be arriving soon.

Many families may be struggling with the issue of repaying credit card debt that is either the result of holiday spending, or general financial strain from the economic downturn. As 2012 begins, it is a time for fresh starts. You can start the New Year off on the right foot by developing a plan to eliminate your credit card debt.

As a first step, consider tallying up all your holiday debts and other debts. This will help you put together a payoff plan, and give you a better sense of what to expect when the holidays roll around next year.

Once you have figured out how much debt you have, develop a payoff plan. Keep in mind that you should be paying significantly over the minimum payment on credit cards if you actually want to pay your debts down.

Ideally, you should attempt to pay off credit cards within a few months of the holiday season to prevent your accounts from accumulating significant amounts of interest. If that is simply not a possibility, you may want to consider other options like transferring your balance to another credit card with a lower interest rate.

For those overwhelmed by debt, bankruptcy is an option to consider that provides credit card debt relief. In a Chapter 7 bankruptcy your credit card debt may be entirely discharged. A Chapter 13 bankruptcy allows you to reorganize your finances, and create a reasonable monthly repayment plan.

Source: US News Money, 6 Ways to Destroy Holiday Debt, 19 December 2011