Paying Off Your Holiday Debt | CCCS of Rochester
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Paying Off Your Holiday Debt

Last month we talked about how to avoid holiday debt. This month we’re focusing more on what to do if you still have debt from the holidays. When the new year rolls around many like to look at it as a fresh start. But starting the year in debt can derail even the most ambitious resolutions. While the holidays may have done a number on your credit score, now is not the time to panic. Declaring bankruptcy may seem like an easy way out, but your credit score will take a hit that will follow you far into the future.

There are a number of steps you can take to try and pay down holiday debt, including cutting household costs, applying various repayment techniques (like a debt avalanche), and looking out for alternative cash avenues. But if your debt seems insurmountable, creditors are on your case, and the situation is calling for more advanced action, consider meeting with a professional credit counselor and looking into a debt management program.

Credit counselors will work with you and your credit card companies to consolidate your debt, lower your interest rate, and create a monthly payment that is affordable and customized to your specific situation, allowing you to avoid declaring bankruptcy. Avoiding these long-term repercussions will help keep you out of credit and financial trouble.

Filing for bankruptcy can impact your credit negatively for years. Paying off debt through a debt management program is designed to take less time, allowing you to finally become the financially healthy person you’ve resolved to be. Debt management programs are set up to help you pay down unsecured loans, including credit cards and medical bills. Experts advise that if you have $5,000 in credit debt or more, it’s time to seek credit counseling. While you can try calling creditors yourself, credit counselors are experts at negotiations and can help you get the most out of the deal.

If you do choose to go with a debt management program, embrace your new lifestyle and follow a few tips: Don’t get a new credit card unless it’s being used for emergencies and always pay on time. As you successfully pay down your debt, your credit score will go up and so will financial opportunities.

Remember, it’s a new year, and resolving to get control of your debt is a worthy endeavor to pursue so that when the holidays roll around again, you’ll have it all covered.