In 2017, American consumers racked up an average of $1,054 of holiday debt. This is a 5% increase from what was reported in 2016. As the holidays get closer and closer, it’s time to make sure you have your debts in order. In this blog, we explain 4 tips that can help you deal with your holiday debt.
Tip #1: Create a Budget
If you want to eliminate all of your holiday debt, you will need to make a solid plan to reach your goal. Write down all of your debts and prioritize the ones you want to pay off the quickest. Look for areas where you can cut back on your spending, but don’t cut back on things you aren’t likely to commit to.
Tip #2: Transfer Credit Card Debt
Many credit card companies offer low or even no interest rates on debt that has been transferred from a competitor. If you pay off your debt within the introductory period, it can save you a substantial amount on interest fees. However, if you are unable to completely pay off the card during this limited period of time, your credit can end up in a worse position than when you started. If you have a low credit score or too many open accounts, you might not be eligible to transfer your balances.
Tip #3: Personal Loan
If you have a solid credit score, you might want to consider an unsecured personal loan. These loans usually have lower interest rates than credit cards. Just like transferring a credit card balance, you need to be cautious when taking out additional loans.
Tip #4: 401(k) Loan
If you are deep in debt after the holidays, you can take out a loan on your 401(k) plan. This type of loan won’t be reported on your credit report, but it can put you in a compromising position when you finally decide to retire.
Consumer Attorneys in Chicago
Are you struggling to pay your debts? Have you received notice of a lawsuit from your credit card company? If so, you should immediately speak to our lawyers about how to protect your rights. We can review your case and build you a strong legal strategy. Let us get to work for you today.