Another holiday season has come and gone. Where did the time go? Now, as December’s bank and credit card statements begin arriving in the mail, you may be discovering that you spent more than you had planned on gifts, travel, food and other holiday-related expenses. According to a news story I heard recently, the average person spent just over $800 on gifts this year, and a good amount of that was purchased using credit cards. That could make for a less-than-festive couple of months, unless you act decisively.
Using credit cards to “get through” the holidays may seem like an easy, reasonable solution, and most of us genuinely intend to pay down our credit balances over just a few months. Unfortunately, those good intentions are often pushed aside by other expenses as January gives way to February and March, and before you know it, the interest is building on your accounts, making your balances even more difficult to pay off. According to a report issued by the Federal Reserve, 53% of consumers were only able to make the minimum monthly payments on their credit card accounts every month. If you’re one of those people, depending on your interest rates, you could be paying off your holiday expenses for decades - literally.
Now let’s talk about what you need to do if your credit card debt is becoming unmanageable. First, don’t put yourself in a position where you’re “robbing Peter to pay Paul.” You’ve still got your normal monthly expenses, and you certainly don’t want to be late on your mortgage or rent just to pay off your credit card balances. There are a few things you can do that will allow you to pay down your balances responsibly and safely.
Unless you have a lot of extra income every month, chances are you’re going to need to develop a plan to tackle those balances. The first thing you’ll want to do is take a close look at your monthly budget and determine if there are any expenses you can reduce or eliminate, perhaps just temporarily. Sometimes, simple adjustments to our spending habits can result in enough monthly savings to allow a problem balance to be paid down in just a few months.
If you can’t identify ways to spend less or increase your income, it may be in your best interest to contact a non-profit credit counseling agency. They specialize in helping people pay their credit card balances in full, generally much faster than they could on their own when making just minimum payments. The non-profit agency I always recommend is Cambridge Credit Counseling, and I’ve been doing so for almost two decades. I’ve seen their operation first-hand and met the dedicated people who are helping people like you every day. They’ve got an A+ rating with the BBB and are the top-rated agency on ConsumerAffairs.com. Here’s how Cambridge can help:
The first thing you have to do is schedule an appointment with one of their independently certified credit counselors. They’ll perform a comprehensive budget analysis, including a review of your income and expenses, and determine the most appropriate course of action for your particular financial situation. Plus, if you don’t have a working household budget yet, they’ll help you create one. Best of all, Cambridge’s counseling is 100% free.
If you decide to enroll in their debt management program, you’ll make one payment to Cambridge and they’ll send payments to each of the accounts you’ve included on the program. So, why is this different than just making the minimum payments on your own? The answer is simple: interest rate reductions. You see, most creditors work with companies like Cambridge to help consumers resolve debt issues, so they’ll usually offer certain program benefits to help you get out of debt faster. One of the benefits that may be extended to you is a reduction in your interest rate. The result is that more of your monthly payment will be applied to the outstanding balance, rather than going toward the interest you’re accumulating. So, now that the holidays are over and the credit card bills are starting to pile up, it’s time to get on a plan to reduce your debt as quickly as possible. I highly recommend that you call Cambridge right away at (800) 897-2200, or visit them online at www.cambridge-credit.org and schedule an appointment with one of their certified counselors today!