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Tips to Recover from Holiday Overspending Debt

The holidays are always a wonderful time for celebrating your loved ones with good food and gifts. However, once the season is behind you and all of the decorations are put away, you may be given an unwelcome surprise in the form of your credit card bill. Before you panic, keep in mind that there are ways to take control of your holiday debt this seasons and alter the path that you take for your future holidays in order to stay debt-free. As you do your rounds of shopping, you may set out with good intentions, however itق€™s quite easy to overspend during this time of year. Here are a few tips to keep you on track to get rid of all that holiday debt as quickly as possible.

Donق€™t Ignore Your Billsق€™ Due Dates

While it can be all too easy to simply pretend that you donق€™t have any bills, and instead throw them off to the side, they are there and you need to pay them. Ensure that you make at least the minimum payment on time in order to avoid unnecessary late fees, which makes the holiday presents and spending even more expensive than it has to be. Keep in mind that making late payments on your credit card bills also negatively affect your credit rating, and so ignoring them really is not an option at all.

Be Aware of Your Credit Limit

Many people use their credit cards to the max. However, in order to avoid getting into holiday debt, itق€™s recommended that you keep an eye on your balance in respect to your credit limit, and ensure that you donق€™t go over. Be aware that if you do then you will have to deal with over the limit fees, which will also make all of your purchases cost more. Also make sure that you are making at least the minimum payments, and more if you can. This way you will at least insure that you are keeping your credit stable. However, whenever you can, making more than the minimum payments will ensure that you are reducing your debt as fast as possible.

Create a Plan

Creating a plan of action is the best way to ensure that you chip away at your holiday debt as efficiently as possible. Take the time to sit down with some paper and a pen and create an account of each of your credit cards and their balance. As you begin making payments make sure that you keep track of those as well in order to see the progress you are making in paying down your debt. Itق€™s a great feeling, and something to even celebrate as an accomplishment when you pay off each credit card to a zero balance.

Don’t Spend Your Money Frivolously

Once the holidays are over itق€™s time to cut back and tighten your belt in order to get out of the debt that you incurred on holiday shopping. In other words, you must be willing to put yourself on a financial diet. Try using coupons and comparison-shopping in order to save money on essential items, and cut those expenses that arenق€™t necessary, such as your morning latte at Starbucks. Doing this can make a big difference, as it can add up to a substantial amount.

Use Your Holiday Bonuses and Tax Returns

Tax returns and holiday bonuses are two lump sums of money that tend to be of a substantial amount, and can be a great way to make an impact on your debt if you use them wisely. Ensure that you fully take advantage of any extra income that you receive by putting it towards your credit card debt, or to use to save towards the following yearق€™s holiday expenses. You should try not to see these things as just free money to spend as you wish. Instead, use the money in order to pay down debt and boost your credit score to aid in meeting your goals.

Be Proactive About Next Year

Now that youق€™ve gone through the ordeal of what itق€™s like to get into debt due to holiday spending, you can be more proactive about next year in order to avoid the same thing from happening. Itق€™s never too early to begin saving for the following holidays. Try making a holiday expenses budget and put away money that is specifically dedicated to it. Even if youق€™re able to save $50 every month, thatق€™ll turn into $500 that you can put towards travel and holiday presents.