Top > Business > 2005 > December > 2005-12-21

Pay Off Your Holiday Bills

Holiday spending has gone up this year from $716/person to $747/person on average. That is an over $30 increase in a year and is sure to put more people in debt. According to a recent survey from the Consumer Federation of America and the Credit Union National Association, over 25% of American`s are concerned about paying off their credit cards debt after this holiday season spending. So if you?re feeling some anxiety about your holiday bills, you?re not alone. Among members of the Armchair Millionaire community, however, we found quite a few who will be paying for the holidays without breaking a sweat. Learn a trick or two from the The Armchair Millionaire?s Guide for Taking Control of Your Holiday Bills.

Pay more than the minimum. It?s all too easy to make only the minimum required payments on your credit cards, especially at a time of year when most of us are dealing with high home heating bills. But think twice: If you spend that typical $747 on holiday gifts this year, use a credit card with an 18 percent annual rate, and make only a minimum payment of 2.5 percent of your balance, it would take you a whopping ten years to pay down your debt. Watch those interest-free offers. If you succumbed to one of those `zero percent financing` or `no payments ?til 2007` deals, keep a close eye on the date your bill comes due. If you don?t pay off the balance in full by that time, you?ll be charged interest on the entire amount, dating back to the date of purchase.

Lower your rate and consolidate. Consider getting a low (or no) interest rate credit card and consolidating all your payments onto that one card. Keep in mind, though, that those low rates are just `teaser` rates, designed to entice you to sign up for the card. Depending on the terms of the card, you?ll only enjoy that nice rate for three to six months. Aim to pay off your balance before the low rate expires.
Plan for next year. Open up a savings account and have 50 or 75 bucks a month automatically deposited in it from your checking account. You?re not likely to miss the money, and you?ll be all set when the holidays roll around next year.