How To Avoid Piling Up Debt And Celebrate A Merrier Christmas

Holiday-trip, however glamorous it may sound – burdensome it is when you go to execute it accurately. Chances are you’ll pile up debt if you don’t make a foolproof plan. Follow 5 holiday-pointed ideas that will keep you safe from debts, and you can enjoy your holidays wholeheartedly.

Start Making Your Holiday Plan At Least 6 Months Ago

Timespan is the funny side of planning. The more duration you’ll spend after it, the more accurate and fruitful the planning will be. The more accurate you’ll execute your plan, the lesser the chances you’ll fall into debt. However, this year, the holidays are knocking at your door.

Decide first how you want to enjoy the holidays? Will you love charting an unexplored destination with your family and friends? Or will you love to throw a lavish party in the backyard of your house? Make your decision quickly! The word planning is interlinked with 3 ‘WH’ words; where, how and when. Let’s clear it one by one.

‘Where’ to start?

Create a Christmas holiday group on WhatsApp. Add interested people. Choose at least 5 ideal tourist places for a Christmas trip. We live in a democratic country; so, take advantage of voting to know where the majority will love to go!

When To Start The Holiday Planning?

As I have mentioned, it is always better to start making your holiday budget 6 months before Christmas. You may use 1 or 2 hours of your weekends to make planning about it. Remember this for planning for your holidays 2020

How you can start it?

First brainstorm about how you can go to your destination at a low cost. You may google cheap motel chains and hostels available in the place. Finding cheap flight tickets is not that hard. Try opting for a break journey route if you’re going to an international destination. You can save a significant amount of money for sure. I hope you’ve understood the following points written above on how to save money during holiday trips and escape from piling up unnecessary debts.

What if you’re a homely person and happy to dine at a restaurant or invite your close ones at home?

Yes, it is a cent percent good plan. You can make yourself free from irrelevant credit card debts. Plan a lunch with friends rather than dinner in a restaurant. Lunch generally costs less than dinner. Arranging home parties and inviting your friends is a good idea too. You can avoid useless debts if you curtail your expenses.

  • Decorate your home within budget.
  • Cook homemade food.
  • Keep a limit on alcohol consumption per guest.

Check out these ideas! It is healthier for your physique and pocket too! Follow these rules to avoid running over by unneeded debts.

Try to save money and increase your income before holiday time start. Search engines can give you thousands of suggestions on how to save your money. They will also give you tips to earn a bit extra. Believe me, follow 2 easy steps. Your money will be saved. You can get the opportunity to increase your income too.

  1. Find a good part-time job. Do it for at least 6 months. You may spend the money, you’ve earned, during the Christmas holidays.

  2. Depend more on Certificate of Deposits than saving accounts. According to the financial stats of this year, people have got a higher return from Certificate of Deposits than on saving accounts.

Around 0.01% is the interest rate on the savings account this year. You may get a higher return if you keep the money in a CD. Keep the money for 1 year in Certificate of Deposits; you may get an average of 2% interest. Utilize your hard-earned income on your holiday party and save yourself from excess debts. Check all the bills properly before using your credit card.

Last July, I attended my cousin’s wedding in New Jersey. My uncle booked a hotel for us. Complimentary breakfast was included in the package. The manager did not tell us about it. We paid our breakfast bill by using the credit card. The 2019 financial report says, 73% of Americans are habituated in paying excessive and unnecessary credit card interest payments.

  • It signifies how we are being trapped into unnecessary debt.
  • It is a mistake I have learned not to commit again during Christmas.

You don’t have to make any big effort to rectify yourself. Don’t remain casual when you pay your bills. Just take a look at the bill whether it is created as per your expenses or not. That’ll be enough.

This simple step can save a lot of bucks!

Use Credit Card More Than Store Cards For Avoiding Unnecessary Debt

You may buy products of a particular store by using your store card. It works in the same way as your regular credit cards. Tempting offers are the reason people generally tend to use them. Just buy products on credit and pay off the amount at the end of the particular month. You may get plush holiday discounts on your purchase by using the store cards. You’ll think oh! Using a store card is so cool! I will get a flat discount on every purchase!

This is not such an easy calculation, friend. Interest charge may be levied on you If you don’t repay the amount in full. You probably have to bear more burden ultimately if you use a store card such as Amazon, Costco or Walmart –   and can’t manage it properly. Look at the 2 reasons why I am saying so.

  • Usually, you have to pay a higher APR (Annual Percentage Rate) on the store card than on a credit card. The average interest rate on a credit card is normally between 10% to 15%. A store card may charge you a whopping 22% interest rate on your balance. Now you decide which way you would like to go?

  • You are almost unprotected against billing errors while using store cards. Unexpectedly, you may get a billing statement against a buying that you haven’t actually done. The CFPB (Consumer Financial Protection Bureau) gets these types of complaints against the store cards every year. Most of them are false charges against consumers. It will be difficult to avoid these payments once you are entangled in such debt.

Why pile up unnecessary debt? Use your credit cards more and stay safe from false debt charges.

Emphasis On Consolidating or Merging Your Credit Card Debts

This is an ‘after-Christmas trip’ suggestion to follow. Choose the balance transfer credit card If you have a high level of outstanding balance with one or more than one credit card. The new credit card may present you with a 0% interest rate or low-interest rate on your outstanding balance when you transfer it to your new card.

The new credit card company may offer you a modest interest rate within the promotional time or the introductory period. Pay your complete outstanding balance within the duration by availing the benefit of the reduced interest rate. The next option you have is a debt consolidation loan. You have to take out a personal loan at a low-interest rate.

  • First, pay off all your creditors with the new loan amount.
  • Second, repay your new creditor through a single monthly payment every month.

You’re free from the hassle of remembering multiple credit payment dates. Your credit score is vital for both the balance transfer method and debt consolidation loan. Try making your credit score above 700 points to keep yourself in the safe zone.

The third option available to you is a debt consolidation program. You have to go to a debt counseling organization. They will first go through your financial condition and enroll you in a consolidation program. Your monthly payment plan will be according to your financial condition. Next, the counselors will go to your creditors and negotiate with them. Maybe, your interest rate will be slashed or some fees will be forgiven.

Your current payment will be less than your previous multiple payments. Make a single payment each month to the organization. The amount will be disbursed among your creditors. By consolidating your credit card debt you may get relief from remembering multiple payment dates.

Don’t let the debt spoil your holiday.  Love, peace, and joy; make the trio your theme for this Christmas.

Happy holiday!

Aiden White

Aiden white is a financial writer reporting on personal finance, investing, and small business. With over a decade of covering personal finance topics, Aiden’s work has been widely syndicated on sites including blogdash.com, columbusfinancialcoaching.com,https://proliteracy.ca/, and https://realestateinfoguide.com. She is currently a financial Writer for consolidatecreditcard.org