How to Cope with Holiday Debt

Time to deal with holiday debt

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Now that the holidays are over, many Americans are mired in debt. Sure it was easy to pull out credit cards for expenses, but now is when the credit card bills are coming in. Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, said, "It will only get worse as the bills continue to arrive…putting it off will only result in ruined credit and more stress."

One of the most important tips the National Foundation for Credit Counseling gives to all its clients is to set a goal date when holiday debt will be paid off. Cunningham stated, "Setting a goal date like March 31, for example, can give you a clear picture of what you have to do to pay down debt."

Credit cards and the future

When you are trying to get out of debt, it is important to stop purchasing on credit. Though small charges seem to be more easily handled with plastic, they add up quickly. Cunningham also instructs her clients that stretching out debt payments as a result of a holiday spending spree, only negates savings. Once the holidays are over, leave the credit card at home. If you can't afford to pay for an item with cash then leave it at the store. Lynn Mayabb, financial planner at BKD Wealth Advisors said, "It is much harder to pay for something if you have to pull cash out of your wallet." Research shows that people who pay with cash end up spending about 20% less than those who use credit. Using cash can cut back substantially on frivolity. … click here to read the rest of the article titled “How to Cope with Holiday Debt“