Expert Advice on Paying Holiday Debt

By Stephen Mazeika   

Despite the gloomy forecasts from retailers regarding holiday sales due to consumer thriftiness this year, a lot of people are still over-spending, and holiday debt can be an annoying burden to deal with after the New Year.

However, there are easy ways to come up with the extra money to pay off some of these lagging bills, and financial advisors have some advice that may help people shave off chunks of their lingering debt in 2009.

Above the minimum

One such practice that people should think about as a New Year’s resolution is paying more than just their minimum payments every month on their credit cards. This is one of the best habits to form, as lower rates and higher credit scores are a positive result. "If you are only paying minimum amounts due on credit cards, it can literally take you years to pay it off," said Linda Cunningham of Securities America in Charlottesville.

Other tips to help you save

There are other miscellaneous tips on lowering your debt and reliance on credit in everyday life. According to Cunningham, it may be as easy as cooking meals at home instead of eating out, monitoring monthly bills to find unnecessary add-on’s such as a second little-used phone line, or cell phone insurance that is possible to temporarily cancel. "You may find that this can add up to $20 to $30 a month," said Cunningham.

Another trick that can lead you to greener financial pastures after the holidays is filing early income taxes. This will allow you to allocate your tax return earlier towards bills. Also, bargaining for lower credit card interest rates with your company can be an easy solution to save you money every month, and it can be as simple as picking up the phone and calling your provider.

Cunningham recommends that if you have a credit card bill of $600, a good time period of paying that off is around 6 months. These are the kinds of goals that people should set for themselves, and with these types of simple habits people can start to see the debt-free light at the end of the tunnel.