Tips for Paying Off 2015 Holiday Debt

If you’re not paying pay cash during the past Christmas season, your credit card bills from the 2015 holiday season will start hitting you mailbox in January. Are you ready to feel the pinch from buying grandma that must have sweater for Christmas?

According to the National Retail Federation, holiday sales is expected to increase by 3.7% to $630.5 billion compared to last year’s 4.1% growth. The average increase in holiday sales for the past 10 years is 2.5%. The average American consumer’s budget for holiday gifts ring in at h$805 with holiday shoppers planning to spend an average $463 on family members, up from $458 last year and the highest in survey history. It will take the average American until May to pay off Christmas bills. That leaves you only 7 months before you begin charging Christmas 2016’s gifts to your cards again.

If you do not want to wait until May to watch those charges drop off your credit cards, begin implementing my post holiday debt reduction plan now!

Stop Charging

If you continue to use your credit card, not only will it take you longer to get rid of the holiday debt, but, you will also pay more interest to do so. Stop adding to the debt by paying cash when you can and by delaying purchases.

Make Some Quick Cash

Is there anything sitting around the house that someone else might want? Get thee to Craigslist, eBay or any other site where you can sell those goods. Remember the old adage, one man’s junk is another man’s treasure. Someone is willing to pay for your junk…or just watch my video below.

Negotiate A Lower Interest Rate

If you’ve been a great customer and you have decent credit, now is the time to cash in. Call your credit card issuer and ask if they have a promotional or lower interest rate that you may qualify for. If approved, you’ll save money in interest fees lowering the overall amount that you will have to repay.

Use Your Tax Refund

Are you expecting a tax refund? File your taxes early and use that cash to repay your credit card. In 2014, the average refund was about $2,700. This year the IRS expects to pay out $230 billion in tax refund with $140 billions returned to consumers by February 15. Instead of splurging on yourself, pay your credit card bill.

The next time that Christmas rolls around (and this tends to happen every year), be a smart shopper by planning and saving ahead of time. Your wallet will thank you for it.

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13 thoughts on “Tips for Paying Off 2015 Holiday Debt

  • I prefer to do the opposite. I have a Christmas fund that is literally in a mason jar. I have budgeted to put a certain amount away every month without fail. I also throw in extra money that I have from time to time and even loose change. I only buy what I have money for. It worked out very well this year… I was able to buy gifts for the people I wanted to and have none of the credit card stress!

    • I rarely use cash, so instead I just save cash back rewards that I have earned through the year and redeem in January. It usually covers the majority of my Christmas spending.

    • I’m with you on putting money away ahead of time, but physically having it in the house would never work for this household…husband is continually dipping into the change jar! If we don’t see it and if it’s not in the house, it doesn’t get spent. So I set up a separate earmarked ING account and automatically transfer a bit each week into the account. Over the course of the year, it adds up to more than enough to cover both birthday and Christmas gifts.

  • Another thought: If you’re getting a paycheck in the U.S., you just took a hit when the temporary payroll tax cut ended. You can get some of that money back and maybe more by revisiting your W-4. You don’t want to have a big tax bill April 2014 so don’t overdo it, but if you’ve got a substantial refund coming this year, scale back your withholding by submitting a revised W-4 to the payroll department. Of course the key is to then devote the extra take home pay to debt pay off, not spending!

  • I also agree with the benefits of putting aside funds before time for whatever you know you’ll need (whether that be Christmas or anything else for that matter). It does require discipline of course but the more often it’s done, the greater the discipline becomes.

  • Planning is the best way to avoid it, but nobody is perfect. So here are a few ideas to help you this year (and next year too.) Postpone visits. Instead of giving all your gifts before Christmas, save a few visits until after Christmas and buy things on sale.

    Buy a small gift and add something homemade like cookies, peanut butter cups (easy and inexpensive) or homemade bread (look up the no knead bread.)

    Offer to clean out a closet, garage or wash the car as your gift. Or if you really like them “undecorate” after the holiday. If they have kids–free babysitting for an evening or two–parents LOVE that.

    Grab that 2016 calendar NOW. Mark your calendar for May, June, July and August. Contact at least 1 person on your list during each of those months and discuss NOT exchanging gifts next year. It doesn’t look like your short on cash–and they’ll thank you for suggesting it.

  • I dont like paying of debt from Christmas gifts so i budget and save before december. This year i managed to save a cool 3 grand for gifts! I still didnt get everything i wanted to get for the kids, but it felt good to not have to think about more debt.

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