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  • Written by a Guest Writer


Shopping is undoubtedly the highlight of every holiday season. Unfortunately, it is also the most debt-increasing time of the year. One cannot help but just let the festive atmosphere and high spirits carry you away and lose track of your purchases.

To help you pay off your extravagant holiday debts sooner, here are some useful tips:

  1. Spend Realistically

It can be all too easy to lose track of your expenditures each month, most specifically discretionary spending like eating out. To be realistic in this regard, you must know for certain how your income is and compare it against your monthly expenditures.

Today’s technology makes it so convenient to track your expenses easily and helps you formulate a plan to pay off heavy debts first. At the same time, also identify which of your expenses are mere wants and not needs and work on abstaining from them. Instead, use that same amount to pay off your holiday debt.

It is also better to avoid bigger purchases until you have completely paid off your holiday debt.

  1. Snowball Method

In the snowball method of debts, you accomplish smaller milestones first. In this case, you tackle your smaller debts and move them out of your way before you move on to bigger debt burdens. We will not consider this method optimal if you wish to minimize your interest costs.

However, if you are an individual borrower, only then can you consider this as an optimal strategy because it rids you of the burden of debt. The snowball method is a far cry from technicality because it does not pay off the highest rate of interest first.

On the other hand, the strategy works to an extent because human behavior being fickle, gains motivation and momentum by paying lower balances first.

  1. Avalanche Method

The avalanche method for debt repayment prioritizes the greater debts first. Thus, it begins tackling the higher rates of interest before trickling down to the lower ones. If one stays committed to this strategy, they would be rid of the debts faster and with lower rates of interest.

  1. Merge Debts

It is possible to merge your lower rate accounts and debts, which is a great idea. This way, you have to choice of a personal loan or opting for a credit card with a lower interest rate.

In fact, you could even look for an account with a lower introductory rate of interest. You can transfer your debt to that account and affordable payments. However, you will only need to ensure you pay off the transferred balances before the introductory rate runs out if you wish to save money.

  1. Speak To Your Credit Card Provider

Many times, credit card providers offer their loyal customers some leniency in case of borrowing. This way, consumers often qualify for lower interest rates. One needs only basic maths to understand how big a difference a lower interest rate makes.

You are able to save a lot of money in the long run, plus also manage to pay off the debt faster. However, this requires an attractive credit score and a track record of timely payments to get lower rates. There is no harm in verifying your track records and your points the lender awards for eligibility.

This article was written by Credit Counsellors Australia. For more information about living debt-free and managing your budget in these tough times, visit their website today.

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