CLEVELAND — It was all about love when Diana Ross sang about the Sweetest Hangover. But it’s not so sweet when you’re talking about a holiday hangover…aka…holiday debt. And break out the aspirin, because it’s a bad one this year.
Consumers racked up $1,325 in debt heading into Christmas…and 78% of us won’t be able to pay it off come January, according to a Debt Survey by Magnify Money.
And if that’s you, financial experts say…man up and stop avoiding the mailbox.
Andrea Woroch, who counsels people on finances says, “You can’t change what you can’t see. So, taking a look at those balances will help you realize…okay, this is serious. I need to make a debt repayment plan.”
First, calculate the maximum you can afford to pay each month. Ideally, it’s a lot more than the minimum required.
But, if you can’t, try to transfer that debt to another 0% to low interest rate credit card. At minimum, call your current credit card company to negotiate.
Matt Schulz, of comparecards.com, a company which reviews card lenders, says, “We’ve done studies that showed that about 80% percent of people who ask to have their interest rate reduced on their credit card were successful. But very few people do that.”
The second step you should take is marking in your calendar when those payments are due or setting up automatic bill payments. Because if you’re late, you’ll rack up even more costs in late fees and possibly have your interest rate raised.