How to cope with the after Christmas Credit Card Crush

By Nicola Pitt

We all see the tips that tell us to spend wisely before Christmas, use cash and only buy what we need if it is in the budget. But when we get to the other side of Christmas, this really doesn’t help much when trying to deal with our ballooning Christmas Credit Statement.

First though, remember that this is not an individual plan to get yourself out of credit issues, and if you feel unable to cope there are bodies out there who will be able to help you. This is purely a range of strategies that you can use to help you in the short term.

1. The statement arrives. Check your statement to make sure that all the items on it are actually your purchases. This is a time when scammers will use your card in the hopes that you won’t check. If you find purchases that you did not make contact your bank immediately.

2. Paying it off. Set up a Periodic Payment system either with your bank or using your internet banking. Be realistic in how much you can afford. This needs to be on top of your monthly required payment account. Even $50 will help. But remember when you get to this point, try not to use the card again. You will be paying interest on every dollar you have used so you need to owe the bank less to get the benefit of the money you pay off.

3. Struggling to make a payment? Contact your bank. Explain your problems. Most banks are pretty good. They will help you to set up a payment program or help you to find a way to make your payments. They may consolidate your debts, they may guide to a personal loan, but if they do that, check the rates, and it is always wise to get help from a Financial Planner. The money that this will cost you will be worth it in the long while.

4. Set up a budget. Work out how much you spend on everything including incidentals – lunch, train, bus, cigarettes – everything. Look for sensible ideas that will help you to save money – take your lunch to work, borrow from the library instead of buying magazines etc., Use this money to pay out your credit card.

5. Start forward planning for next year. Allocate a budget so that this does not happen again. Use Layby rather than your card. Keep an eye on the sales. Keep a list and stick to it.

You can get yourself out of the Credit Cycle – it can be painful, you may need to go without some of the things you like, but this is achievable. Then downgrade the limit on your card if possible, open a targeted savings account and reap the benefits of long term goals and planning. Your bank balance will thank you for it.