“`html

How to Manage and Pay Off Holiday Debt

Consumers often spend more during the holiday season than at any other time of the year, frequently using various forms of financing. According to an Experian holiday shopping survey, 56% of respondents expected to use a credit card, and 19% planned to use a personal loan or buy now, pay later service.

While it may be tempting to delay paying off holiday purchases, addressing your holiday debt quickly can help you prepare for the next season. Here are some steps to help you manage and pay off your holiday debt effectively.

1. Take Inventory of Your Debts

Start by taking stock of your debt situation. Log in to each of your accounts and note the following information:

• Balance
• Minimum monthly payment
• Interest rate

Knowing how much you owe and the cost of each debt can help you prioritize which debts to tackle first.

2. Review Your Budget

If you don’t already have a budget, create one by determining your monthly income and expenses. Categorize your expenses to understand where your money is going. Evaluate your spending to see how much you can afford to put toward your debts in addition to your minimum payments. Consider cutting back in certain areas to free up more money for debt payments.

3. Try a Repayment Strategy

Consider an accelerated debt repayment plan if you have a relatively small amount of debt or want to avoid applying for another loan or credit card. Some effective options include:

• Debt snowball method: Pay off the smallest credit card balance first while making minimum payments on other bills. As you gain momentum, put more money toward the next biggest debt until all debts are paid off.
• Debt avalanche method: Focus on the debt with the highest interest rate first. This method can save you more on interest charges over time.
• Debt snowflake method: Track small everyday savings and add them to your monthly payments. This method requires meticulous tracking but can make a significant difference over time.

4. Consider Consolidating Your Debt

If you have a sizable amount of debt and good credit, consolidating your balances could save you money and time. Popular debt consolidation options include:

• Balance transfer credit cards: These cards offer an introductory 0% APR promotion, allowing you to move debt from another credit card or loan and pay it down interest-free over 12 to 21 months.
• Personal loan: A personal debt consolidation loan provides a structured repayment plan, typically with lower interest rates than credit cards.

5. Get Help From a Credit Counselor

If your debt situation feels overwhelming, consider speaking with a credit counselor. They can provide expert, personalized, and often free advice. A credit counselor may recommend a debt management plan, which can offer structured repayment terms with potentially lower monthly payments and interest rates.

6. Prepare for Next Season

As you work to pay down your holiday debt, consider ways to minimize or eliminate your reliance on debt for the next season. Options include:

• Cutting back on lifestyle spending: Adjust your budget throughout the year to make room for holiday expenses.
• Automating holiday savings: Determine how much you need to save each month and set up a separate savings account with automated transfers.
• Creating your holiday budget early: Plan your holiday budget in October to avoid last-minute financial stress.

Increase Your Credit Score to Improve Your Options and Save

Building and maintaining a good credit history can help you qualify for affordable credit when you need it most. Start by checking your credit score and report for free with Experian. Use this information to understand where you can make improvements and monitor your progress over time.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team is here to help you with all your mortgage needs.

“`