Credit Cards

Landed in vacation debt? Your 5 point payment plan

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Don’t let Christmas debt drag on. Here’s how to get rid of it.

Key points

  • It is common to end the Christmas season with debt.
  • The right strategy to make that debt disappear might include redoing your budget or getting an extra job.

Many people make a commitment not to overindulge at parties, only to end up in debt when the season is over. If that happened to you this year, don’t give up.

First of all, you are certainly in good company. But also, sales were harder to come by this year due to supply chain issues and inflation, so you may have had a harder time sticking to a budget.

If you’re starting 2022 with a ton of Christmas debt, you’ll want to get rid of it as quickly as possible. The longer you carry that debt, the more interest it will accrue and the more it could hurt your credit score. Here are five steps to get rid of your Christmas debt quickly and efficiently.

1. Look at the big picture

Knowing how much debt you have accumulated is your first step in paying it off. Take a look at your various credit cards and see what your balances entail. Knowing that total will help you deal with your debt more effectively.

2. See if there is a more affordable payment route

If you charged your vacation expenses to multiple credit cards, you may now be looking at some pretty high interest rates on your debt. If that’s the case, lowering those interest rates will make your debt easier and cheaper to pay off.

One option to consider in this regard is a balance transfer, where you transfer your various balances to a single card with a lower interest rate (or, ideally, a 0% introductory rate). Another option is to take out a personal loan, use it to pay off your debt, and then pay off that loan at what should be a lower interest rate.

3. Rework your budget

You may need to cut back on some short-term expenses to free up cash for debt repayment. Take a look at your budget and see which spending categories count as non-essential. Then consider reducing your spending in those areas until you’ve made a good dent in your debt.

4. Get an extra hustle

You may not have many expenses in your budget to cut. Or maybe you don’t want to give up your streaming services, morning coffee, and weekly takeout. If that’s the case, getting an extra hustle could make it a lot easier to quickly pay off your vacation debt. Since that income won’t go toward other bills, you can use it to pay down your balance.

5. Get Cash for Holiday Gifts You Got But Don’t Want

The custom knit sweater with your name on it that your aunt made is a holiday gift that will probably catch your eye. But if you received gifts you don’t really want or need, selling them for cash could leave you with a good amount of money to pay off your debt.

If you have gift cards for stores you don’t really frequent, there are sites like that allow you to exchange them for cash. And you can sell electronics, clothing, and other items online through your local social media marketplace page. Or host a good old-fashioned yard sale.

Starting the new year with Christmas debt may not be ideal. But if that’s the situation you find yourself in, don’t despair. If you commit to paying off your debt, you’ll be amazed at how quickly you can eliminate it. And once you do, you’ll be in a strong position to start saving for next year’s vacation to prevent a repeat.

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