Estimate Your Expenses, Pay Less on Your Credit Card Debt

Author: DJWillis | Posted: 28.03.2012

A written report from the National Retail Foundation indicates consumers spend around $9.3 billion on spouses and significant others for Valentine’s Day. The average man will pay about $203 on gifts, while women will pay $102. While that may not appear to be a large quantity, should you factor in the cost of a romantic dinner, money spent on a nice evening out, and all the other charges that play into Valentine’s Day, it’s easy to understand how you can accumulate credit card debt when you show your love.

With consumer debt already up from this past year following the 2011 holidays, many consumers are still busy paying down charge card debts from December even as they accumulate more debt from Valentine’s. This is often a perfect recipe for financial hardship-particularly in this particular tough economy. Before very long, all the back-to-back holiday expenses may give you more credit card debt than you can handle. So what’s the best way to eliminate all that holiday credit card debt?

Firstly you need to find out exactly how much you owe and to whom. Jot down each credit card debt you've got and take notice of the interest rate. After you have all of your debts in order, you can assess your circumstances and determine the best strategy to repay your debts. You’ll also need to get an accurate figure based on how much income you bring home every month along with a rough estimate of your expenses, as you need to be aware what you have available to pay your financial situation off.

For those who have money to start paying down the money you owe without debt consolidation, you can use a couple of strategies:

1. The snowball technique: Begin with your smallest debt. Pay the minimum amounts due on all your debts then put all your extra money towards paying off the littlest debt first. Once you pay it back you’ll have more money free each month, which you then put paying down your next smallest debt. You build up momentum to eventually tackle your biggest debts.

2. The high interest strategy: Start with the debt that carries your highest rate of interest. Pay all of your minimum amounts due and put all extra income towards paying off your highest interest rate debt completely. This way, you’re eliminating the balance that builds the fastest first. Once you pay it back, take your extra income and put it to use towards paying off the following highest rate of interest debt.

In the event you splurged enough on gifts between the end of the year and Valentine’s Day, you may have enough debt that a simple debt reduction strategy isn’t really going to get you anywhere. When simple budgeting and debt reduction techniques don’t work, it’s time for you to look at debt consolidation to get you relief. You might desire to find a certified credit counselor who can assess your debt and supply options for relief. In many cases, they may recommend that you enroll in a debt management plan, which consolidates your debts into one monthly payment. You can pay off your credit card debts and get your finances back on track so you’re not still paying off your Valentine’s Day debts from this year when the holiday rolls around again in 2013.

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