Every year around mid-January it happens...
We get reminded of all those purchases we made over the holiday season as the credit card bills start to come in.
Whether it's gifts we purchased on existing credit cards or new accounts that we opened, the reality of the new debt created in the new year hits us.
Custom examples:
The Korean Paekjong Under Japanese Rule: The Quest for Equality and / The Great Father: The United States Government and the American
Here are some tips to help take care of those new bills now and keep your credit in tact:
1. Always pay more than the minimum payment
Reports
Substance Abuse (text only) 4th (Fourth) edition by T. C. Harrison / Curso De Tecnicas De Cortes. Multicortes / Words Are Not for Hurting (Ages 4-7) (Best Behavior Series)
If credit card companies had it their way, you would always make the minimum payment (or even not pay, get hit with late fees, etc. - but that's another story).
If you only made the minimum payment, you would find that it would take several years to pay off the entire debt and you would actually end up paying an amount that is much higher than the original amount borrowed... that's if you even ever pay it off at all!
Make sure to always pay off more than the minimum amount (as much as you can).
A good rule of thumb I use is to always pay at least double the miminum payment.
Also, try to pay off your highest interest cards first, then tackle the lower interest cards after the highest interest cards are paid off.
2. Always pay your bills early or on time
Make sure you review all of your new statements and verify not only the minimum payment due, but when it's due.
Now isn't a bad time to actually review everything on your credit card statement to make sure it all looks correct.
Make sure you don't see any charges made over the holiday that you don't recognize.
While you're examining your credit statement, some other things you want to check up on are: amount of debt owed, interest rate, items purchased, credit limit, any penalities for late payment, and how far you are within your credit limit.
3. Use holiday cash gifts and tax refunds to pay down debt quickly
Did you get a lot of cash for Christmas this year$%: If so a great use of that money would be to pay down most or all of your credit card debt.
Also, if you plan on receiving a tax refund this year, file your taxes and get the refund as soon as possible.
There are two reasons this makes sense:
First, if you have a tax refund due, you are leaving money on the table. As long as the government has that money and you don't; you are not earning interest on it. Basically you are giving the government an interest free loan. Get more money back as quickly as possible.
Second, while the government is holding your cash, you are not earning interest on your money. At the same time you are paying plenty of interest to the credit card company as long as you keep your debt with them. Use your tax refund to pay off those bills and stop paying high interest rates.
There are many tips and strategies you can use to manage your money, credit, and debt.
Using the three strategies outlined above are three of the most effective and immediate things you can do to manage your credit and recover from the holiday spending surge.
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