Best Ways to Pay off Your Credit Cards after the Holidays

Holidays are fun, but all the merry making
comes at a cost. While you may be an avid budgeter, it’s possible that you end
up spending more that you intended due to the unforeseen cost of festivities.
Most of these expenses end up racking up your credit card debt, which can be as
high as over $1000.

Credit CardsCredit Cards

No matter the amount of debt you are looking
at, managing that debt is the best way to start off the new year. To guide you
on this, here are the best ways to pay off your credit cards after the

Start by Making a Budget

Whenever debts come into play, the first step
is usually coming up with a budget and sticking to it. This is the best way to
track your spending and to ensure that you do not divert your income to
unnecessary expenditure. Start by modifying your existing budget to reflect the

This will force you to assign every dollar to
debt repayment, savings or important expenses like bills and groceries. To free
up money for the increased debt, you may have to forego some non essential
expenses such as driving to work and eating out, for public transport and home
cooking respectively.

Stop Using the Cards

This might sound impractical and harsh but
it’s the only way to keep the existing credit card debts in check. Continuing
to use the cards will only raise your debt which can lead to frustrations, and
eventual disregard of your budget.

This is easier said than done hence you
should adopt extraordinary measures. For example you can lock away the cards,
cancel subscriptions that you charge on the cards and switch to cash or debit
cards for all expenditure- until you have paid off the debt.  

Consolidate your Debts

Credit cards usually come at a higher
interest rate than other lines of credit. As of 9th January, the average credit
card APR stood at an all time high of 17.41%.
This is in contrast to personal loans which come at a fixed rate which can be
as low as 4.5%.

With this in mind, you can reduce the
bleeding by consolidating your credit card debts with a personal loan. Not only
will this reduce the payable interest, but it will also help in increasing your creditworthiness;
personal loans are more favorable on your credit scores than credit card debts.

Prioritize your Repayments

Credit cards come at different interest
rates. Knowledge of this can help you in formulating a specific order in which
to settle the debts. The idea would be to reduce payable interests and roll
over payments. For this to work, start by paying off the credit cards with the
highest interest rates. This approach will help you to save precious dollars in
the long run. This is especially so if the cards with highest APRs also happen
to carry the highest balance.

Having said that, this could mean taking a
long time to clearing off a single card, which can be demotivating. In such a
case it would also be helpful to integrate your payments with clearing off some
of the cards with lowest balances- this will help in motivating you to carry

Increase your Income

Unless you have assets that you can sell, all
debt repayments will come from your income. Thus it goes without saying that
earning more money will increase your chances of being debt free. Boosting your
income will require you to add on your overtime hours or get another job, which
can be in form of a part time job like walking dogs or driving for Lyft.   

easy to find yourself facing a whole year of credit card debts due to
unintended over-the-holidays expenses. There are several ways to getting out of
such debts as highlighted above. The bottom line to avoiding dragging the debts
however lies with coming up with a solid repayment plan and sticking to it at
all costs.