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8 Ways to Slay Your Holiday Credit Card Balances

Tropical Financial Credit Union
By Tropical Financial Credit Union - March 1, 2024

After a wonderful holiday season, you might feel a letdown when you open your credit card statement. Gift-giving and travel bring joy – at a cost. Take heart and action. Here are 8 strategies to manage and eliminate credit card debt accumulated during the past few months:

  • Add up the balances. Gather all credit card statements and analyze the balances. Which have the highest interest rates? Which have the lowest minimum payments? A clear picture will provide the foundation for crafting your repayment strategy.
  • Rank the repayments, part I. Prioritize the cards based on the interest rates or the smallest balance. The ones that charge the highest interest raise your outstanding balance the fastest. Using the “avalanche method,” put most of your monthly payment funds toward that account.
  • Rank the repayments, part II. But what if the balance on that high-rate card is tiny compared to that on a lower-rate card? Then, use the “snowball method” to eliminate the lowest balance first so that you can free up money sooner to pay off larger debts.
  • Eliminate the excesses. Every dollar saved is a dollar earned toward reducing your credit card debt. One common tactic: Cancel online services that you rarely use. The same approach applies to gym and club memberships. You splurged on dining out during holidays. Now, it’s time to go on a financial diet. See a store or website item you’d like to buy right now? Save it as a reward for taking back control of your credit cards.
  • Pick up the payment pace. A minimum monthly payment barely dents your debt. Regularly exceed that dollar amount, and you’ll save a lot of money. Consider diverting tax refunds, bonuses, and shareholder dividends toward balance reductions.
  • Find a lower-cost loan. A balance transfer to a card with a 0% introductory annual percentage rate (APR) will buy you breathing room to accelerate your repayments. Alternatively, consolidate the balances into one unsecured personal loan; the rate could be much lower than that on your credit cards. Tropical Financial offers personal loans and lines of credit with competitive rates and terms.
  • Moonlight for Extra Money. What skills and talents can you offer another employer in your off-hours? The money earned over a few months will lighten your debt burden faster and improve your finances.
  • Seek external expertise. You do not have to do this alone. As a member of Tropical Financial, you have access to accredited financial counselors, online tools, webinars, loan coaches, budgeting software and more.
  • Celebrate each card payoff. Paying down card balances takes time, and the process is often stressful. Congratulate yourself – modestly – every time you achieve a goal. It can be a zero balance, a balance reduction milestone, or a restructuring of your debts to take pressure off your finances. As your financial plan succeeds, credit yourself for being patient and persistent.

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The content reflects the view of the author of the article and does not necessarily reflect the views of Tropical Financial Credit Union or its employees.
We do not guarantee the accuracy or completeness of the information presented in the article.