Many Americans opt to use credit cards to pay for holiday expenses. Unfortunately, this means that they start the new year in debt. Trying to pay these bills off becomes a priority because the account is constantly accruing interest. If you plan on using your credit accounts to pay for Christmas gifts, you need to make a plan to pay off the balances soon after the new year, so you aren’t saddled with it all year long.
First, figure out how much extra you can pay toward the balances each week. Include this amount in your budget so that you can knock the balances down as quickly as possible. Your goal should be to pay as much as you can, so you aren’t accumulating too much interest on the balances.
Second, try to find extra money to put toward the debts. This might mean picking up an extra shift at work or starting a part-time job. Make sure that you use the money only to pay off the Christmas debts. You can always move this money to another debt if you decide to keep the job after the Christmas gifts are paid off.
Third, make a plan for next Christmas. After the Christmas charges are paid off, you may decide that you are going to save up for next Christmas. Be sure to put the funds somewhere safe. You shouldn’t be tempted to use the funds, so don’t keep it in your main account or in cash.
If you realize that you aren’t able to pay off your debts because you have more money due than you earn, you might choose to file for bankruptcy. If you are considering this, don’t use your credit cards to purchase gifts. They might claim that you committed credit card fraud by making purchases immediately before your filing.