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How to recover from a Christmas debt hangover

- December 28, 2021 2 MIN READ
What to do about a Christmas debt hangover

The excitement of treating the ones we love with presents can quickly turn into a Christmas debt hangover of epic proportions.

It seemed like such a good idea at the time – the iPhone 13 Pro for your partner, an expensive coffee machine for Dad, the silk scarf for Mum, not to mention the endless pressies for the kids. 

But now Christmas is over, all you have to show for your generosity is a bad headache from looking too hard at your credit card statement. The warm fuzzy feeling you got from giving the gifts in the first place seems a long, long time ago.

Don’t let this Christmas debt hangover spoil the start of your year. Instead, take charge of your finances, get your credit card bill down and make sure you’re not in the same sad situation at this time next year.  

Manage your credit card debt

The best news for managing a credit card debt is that interest rates are slightly lower now than they were at the same time last year.

Sorry, but that’s the only good news. You need some quick strategies you can put in place to help get debt levels down.

If you can, cancel the card. This will avoid the temptation of living off credit in the future.

Then, set up a regular payment from your savings account to your credit card account to get that debt down. Think of every payment as pain relief for your Christmas hangover.

Setting up an automatic debit means you won’t have to remember to make a payment each month, and helps avoid the risk of not making a payment. The key is to pay as much as you can towards your credit card debt. Never fall for paying only the minimum due.

Combine your balances

If you have a number of credit cards, it’s also an idea to combine their balances to reduce the amount of interest payable on the combined debt. Make sure to use the card with the lowest interest rate if you’re going to consolidate your credit card debts, and shop around for the best deal. 

Different banks provide different incentives to cardholders who are combining balances and it’s worth checking out which bank can offer you the best deal before deciding which way to go. 

Next year, avoid overspending

It sounds self-evident, but the best way to avoid ending up in a debt hole next Christmas is to make a financial plan for your Christmas expenses and stick to it.

Set a budget for Christmas presents and do online research before you go shopping to find out how much things cost. Internet research is also a great way to find the best deal on many items. Ebay is another great avenue for finding discounted  gifts and take advantage of the big sales.

Some banks also offer Christmas savings accounts, with the idea being that you put away a certain amount each week all year so that when Christmas comes, you’re not caught short financially. 

There are also Christmas hamper companies that allow you to pay off a Christmas hamper over the course of the year. You can also elect to save points or money back on your groceries to pay out at Christmas.

No matter which methods you choose to help you reduce your financial burden next Christmas, it’s an idea to start saving now. Without careful planning, your Christmas debt hangover could extend for years.