4 Tips to Recover from Christmas Debt

Recovering From Christmas Debt

As the joy of the holiday season fades into the pragmatism of the New Year, it’s time to analyze your Christmas spending.

If you, like millions of Canadians, find yourself in debt this coming January, it’s important to follow expert advice on managing your finances. Here, we’ll help you arrest the financial slide by offering four tips for recovering from Christmas debt.

1. Combine Your Balances

One of the leading challenges many Canadians find themselves in when paying off their credit card debt after Christmas is when they they’ve continually made small payments on multiple cards. While this type of debt payment might make you feel more secure from month-to-month, it does little to alter the bigger picture.

You must find a way to combine the debt into one payment per month to see your true debt costs. Try shopping around for a low interest balance transfer credit card. This can help you get to grips with your true debt problem and begin to formulate a plan for recovery.

2. Return Unused Purchases

We’ve all been in a situation before where we’ve bought a gift without really considering its value. But for those with significant debt, it’s important to analyze how much value these gifts could bring if returned to the store. Whether you made the original purchase with cash or a credit card, the refund will provide some financial value and may reduce those looming end of month credit card payments. Even if it is slightly past the return date it can’t hurt to ask the vendor if there is anything they can do.

3. Contact Your Creditors

This is one step that most people forget in their Christmas debt recovery plan. While it might seem like the credit card companies are faceless organizations, you might be able to work out a convenient payment plan that protects both your credit history and your current finances while you work through your debt.

Credit card companies have only one bottom line: To get their money. Luckily for you, that bottom line isn’t always a race to get to it. If you call your credit card company, there’s a chance you can work out a plan that will be helpful to you and will give the company their desired payments.

Remember to pay close attend to your account statements. On many statements they are required to show you how many years it will take to repay the debt at the minimum payment amount. Remember to be realistic about you income and your repayment ability and seek the assistance of a debt counselor or trustee when needed. Also try to focus of the debts with the highest interest rate first as the quicker you pay them, the less interest you will have to pay, and the more funds you will have to pay the other creditors.

4. Maintain a Close Eye on Your Debt Recovery Progress

As you pay off your debt, remember to create milestones within the payment plan. This will help you celebrate each step in the process and allow you to see paying off of debt as a step forward and not a step back.

Depending on your amount owed, you might want to give yourself a gold star on the calendar or a pat on the back for each $1,000 you pay off toward your overall debt. It’s important to make others a part of this progress. Work with your family or friends who may be in a similar situation to keep you motivated and share saving ideas.

Decisive action and prudent financial management can bring back the feeling of Christmas joy to those with significant debts to their name after the holiday season. Focus on organizing your financials and work toward tangible objectives and you’ll find debt management success.


Speak to an expert today.