Surviving The Holidays With Your Credit Intact

It's that time of year when people go out and splurge on presents for family and friends. But with those brightly colored packages come big bills. If you're like many Americans, you have paid for those new sweaters and toys with your credit card. So how can you make sure you'll be able to pay down that debt? Diahann Lassus, CFP®, is president of Lassus Wherley. She gave viewers these tips on effective ways to use credit cards, and hints on how to pay down that debt after the family goes home.

3 Tips on Using Credit Cards

1. Define Your Objectives - Put together a budget and decide how much money you will spend for the holidays. Stick to that budget!

2. Be Realistic - Don't set yourself up for failure. If you set your budget too low, you won't be able to stick to it. If you fail the first year, you will never make a budget again.

3. Take Advantage of the Competition - All credit card companies offer the ability to transfer balances, offer low rates, etc. If you're going to use credit, use it smart. Take advantage of the competition and transfer your balance to a card with a lower interest rate.

5 Hints on Paying Down Debt After the Holidays

1. Add extra dollars to the minimum payment. Even if you only pay $5 extra, it will reduce the interest cost and help you get it paid off more quickly.

2. Understand when it could be paid off. Get a picture of how many months it will take to pay down the debt. You'll see the light at the end of the tunnel!

3. Avoid using a home equity loan to pay down your credit card debt. If you move your credit card debt to a home equity loan you are taking your consumer loan and putting your home at risk. In fact, Diahann doesn't suggest taking out any type of loan to pay down debt. Just continue to pay it down in a systematic way, the same way you would pay off a car.

4. Negotiate! There is tremendous competition among credit card companies. Offer to transfer balances to one credit card in exchange for a lower rate. If you have a large balance, you have negotiating power.

5. Manage your spending. You can't continue to spend at the same rate and pay down your credit card debt at the same time. You have to make a consorted effort not to spend as much or you just end up spinning your wheels.

Contact us to learn more about surviving the holidays with your credit intact

By Diahann W. Lassus, MBA, CFP®, CPA/PFS

12/8/1999