It is usually a good idea to consolidate credit card debts before the holiday season starts. Reports reveal that the total balance of credit card accounts in the country grew to be $868 billion after the second quarter of 2019. Considering how Americans spend during the holidays, it is not surprising if this amount grows further by the end of the year. Consumers will not be deterred from their spending just because they do not have enough cash. Since they will be sharing their blessing through holiday gifts, the use of credit cards despite the threat of holiday debt becomes acceptable.
While it may seem like having holiday debt is the norm, that does not mean you should follow the trend. It is still better to go through the holidays without any debt. When you are free from debt, it is easier to prolong the celebratory feeling that you enjoyed. But if you used debt, that feeling will be short-lived. As soon as the festivities are done, you will start worrying about the money that you spent. You will soon find yourself stressing about the payments that you need to meet.
This is the reason why you need to consolidate credit card debts before the holiday season officially begins. The question is, how do you go about it?
How to consolidate credit card debts before the holidays?
Consolidating multiple debts is not really complicated. It actually involves a simple process of opening a new credit account that can pay off your multiple credit accounts. After the process is done, you will be left with one credit account. It will simplify the repayment plan and it should make it easier to meet the credit obligations. This will most likely ensure that you will have your debts under control before the holidays.
But how should you do it?
First of all, you have to make the decision to start now. In no time at all, the holidays will be starting. You need to start working on your debts immediately. Sometimes, when people procrastinate, that is when it becomes a bigger problem. Debt is not something that you should ignore. This is one problem that you should not ignore because it will only get worse the longer you act on it. This is why you need to act immediately to achieve debt relief. Doing it before the holidays should be a great timeline to follow.
Choose the right consolidation strategy
Once you have decided to act on your debts now, it is time to choose the right strategy to make it happen. There are a lot of options to consolidate credit card debts. You need to find the right one that will benefit your finances the most.
To do that, you need to analyze your payment capabilities and your debt situation. You should also consider your future plans while choosing the right debt relief strategy. For instance, if you have a bad credit score, you might be better off with debt management or debt settlement. But if not, you can opt for a debt consolidation loan. And if you need a significant debt reduction, debt settlement is the right debt relief strategy.
Create a timeline
After choosing the right debt solution to consolidate credit card debts, it is time for you to create a timeline to meet your target – to be debt-free by the holidays. If you have a lot of debts, this may not be possible – but that does not mean you should give up. Pay as much as you can from now until the holiday shopping season begins.
Stick to the plan
From the time you start paying off your debts, you need to make sure that you will not deter from your plan. Stick to the amount that you need to pay off. The only time that it is acceptable to not follow the monthly payment is when you are planning to pay more. You need to discipline yourself to meet the amount that you have set in the plan because that will also help you develop some self-control. It is always a good idea to learn how to be disciplined with your finances. It will help you control your spending – especially when the holidays will tempt you to spend more than what you can afford.
Why consolidate credit card debts before the holiday starts?
You might be wondering, why should you consolidate credit card debts if you can just use the money to save for your holiday expenses?
Here are the important reasons why you need to focus on paying off your debts
To get rid of the high-interest debts
If you have a lot of credit card debts, it makes sense to pay it off first because you will save money on the high-interest. As long as you carry over a balance to the next billing cycle, the finance charge will be added to it. This charge is calculated using the high-interest rate and balance. The higher the balance and interest rate, the more charges will be added to your balance. But if you can significantly reduce your balance after every payment, it will help you save on the finance charges.
To lower holiday stress
Another benefit when you consolidate credit card debts is a lower feeling of stress. It does not matter if you feel like you can afford to pay off your debts. There is always this lingering feeling of stress and anxiety. This feeling can keep you from fully enjoying the holiday season. Every time you have to make a purchase, it is not unlikely that you will feel guilty. You know that you should have paid off your debts. The more you spend, the higher the stress because at the back of your mind, you know you still have to face your high-interest credit card debts.
To avoid holiday debt
Reports reveal that Americans ended up with more than $1,000 worth of holiday debt during the 2018 holiday season. Since you are feeling stressed, you will most likely make a lot of bad decisions along the way. You will not have the right state of mind to be smart with your financial choices. Instead of being diligent in finding better deals, you will just give in to the feeling of frustration. That will make you buy things without really considering if you can afford it or not. This can lead you to accumulate holiday debt. If you want to avoid this, get rid of the cause of your stress. Start working on your financial issues and consolidate credit card debts. If you can get yourself debt-free, that can be the greatest gift that you can give yourself.