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Racked up holiday debt? Take a look at your game plan for getting rid of it.
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If you’re coming away from the 2023 holiday season with a mountain of credit card debt, you’re not alone. Each year, an estimated one-third of U.S. adults go into debt to pay for holiday expenses, according to NPR.
The problem with holiday debt, though, is that the longer it lingers, the more it might cost you. So it’s in your best interest to knock out that debt as quickly as possible. And you can do so by taking these steps.
Step 1: Consolidate
Juggling balances on different credit cards can be tough. You might forget to make a monthly payment on one of your cards, and keeping tabs on multiple balances can get overwhelming.
That’s why it pays to look at consolidating your debt. Doing so could make it not only more manageable, but potentially less expensive.
One option to consider is a balance transfer to a 0% interest rate credit card. If you can avoid racking up additional interest for a period, you might manage to get ahead of your debt. However, be warned that once your introductory period ends, the rate on your debt could skyrocket.
READ MORE: How Does a Balance Transfer Work?
Another option you can look at is a personal loan. The nice thing about personal loans is that they offer the benefit of fixed interest rates and predictable monthly payments until your balance is paid off in full. Plus, if your credit score is in good shape, you might manage to qualify for a competitive interest rate on a personal loan.
Step 2: Cut some spending
Consolidated debt still needs to be paid off. And in the case of a credit card with a 0% interest rate for a limited time, you may be up against a clock.
Take a look at your current set of expenses and see where there’s room to cut back. You don’t need to commit to permanent cuts. Rather, you just have to free up enough cash to pay off your debt. Once that’s done, you can go back to spending on more of the things you love.
Step 3: Boost your income
Unless you’re making drastic changes to your spending, it might take a big jump in income to be able to pay off your holiday debt quickly. It pays to explore your options for joining the gig economy.
Think about your schedule and how much flexibility you need. If you can’t commit to a preset gig on evenings and weekends, then doing something like grocery delivery may be a good option. If you can commit to a more fixed schedule, then you could do anything from working at a catering hall on weekends to taking on a retail position.
You may also be able to find a side hustle based on the things you love. If you adore animals, consider making a profile on a site like Rover so you can find clients in need of services like pet-sitting and dog walks.
You don’t want holiday debt to drag on for months (or years) on end. Follow these steps to rid yourself of that debt before 2024 comes to an end.
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