Here we go again…2017 is well and truely here, and for many of you so are the traces of extragavances enjoyed by all over the preceeding few weeks. Christmas and New Year are certainly full of fun times with family and friends, trips away and exchange of presents. Unfortunately reality hits home soon enough with the arrival of credit card bills in early January.
If you are unfortunate enough to be “snowed under” with out-of-control debts, not all is lost. There are a number of debt relief strategies that you may wish to implement to help you pay down holiday debt and bring your finance under control.
Make sure that at the very least you maintain all the scheduled minimum repayments set by your credit card providers. Doing this will protect your credit history and allow you to consolidate your unsecured card debts into a lower rate credit card or a personal loan. This is only a short term strategy, but no repayments should be missed.
Many credit card providers are marketing 12-24 months offers of 0% interest on any debt rolled over to them from other credit card providers. This is the best strategy for holiday-acquired debt. Borrowers should roll all credit card debt into a single 0% interest card and use the interest free period to repay as much of that debt as possible. Once the interest free period is over, you will need to move your debt to another car provider with the same offer and repeat the process.
This strategy, offers consumers an opportunity to pay down unsecured debt fasterer, at 0% interest.
Do make sure that you are not using the credit card acquired for debt reduction, for any other purpose. Otherwise new debts will continue piling up and the debt reduction strategy will fail.
In some circumstances it may be advantageous to consolidate your credit card and other unsecured debts into a single personal loan. This way you know that by sticking to the set repayment schedule you will fully repay your debts within 3-7 years. Be mindfull of the interest rate being charged for such a loan, as this may make debt repayment prohibitive.
interest free deals
With lots of free time on your hands and holiday specials in the shops, it can be easy to fall victim to the Christmas Sales….after all why not buy that new furniture or a TV set if you can have it interest free?
Beware of interest free deals as they can prove to be far more expensive than they appear at face value.
home loan deals
With added family debts you may be tempted to consolidate these into your home loan. While doing so can certinly offer you the money your are after at a low 3%-4% home loan rate, remember that unless you make a concerted effort to repay the extra Chrstms debt ASAP, you will end up paying interest on it for up to 20 years, – hardly a good deal.
Nonetheless those who can qualify for consolidation of holiday debts into their mortgage, can do well if they make extra repayments to repay the newly acquired debt within a year or two of the consolidation.