A Unique Way to Deal With Holiday Credit Card Bills in the New Year

by Bill on January 6, 2014

Bright IdeaIf you find yourself needing aspirin in January after looking at your credit card bill, you’re not alone. Most people don’t realize how much they actually owe until after the bill arrives.

Say No to Plastic

So, unfortunately for many people, the hard part comes first – putting down the credit card. If you’re going to successfully deal with holiday credit card bills you must say ‘no’ to the plastic for more than just 30 days.

Place the credit card somewhere that it can’t easily be used immediately; frozen in a bowl of water in the back of the freezer is an option. You can mail it to someone you know miles away too. Notice I’m not saying to get rid of the credit card altogether. Make using the plastic difficult to where it’s easier not to use it; at least until you get through the next part below.

The Balancing Act of Budgeting and Consolidation

If you have more than one credit card payment each month, you should consider consolidating the payments onto one card at this point according to many credit counseling services such as the Credit Counselling Society in Canada. This has two positive effects: it not only eliminates multiple bills and headaches; but also lowers the potential interest rate paid.

The problem here is that people forget to create a spending and household budget. If you consolidate your cards, but don’t create a budget to provide a manageable payment each month, it doesn’t do anything. You are still in danger of being unable to deal with the credit card payments; or worse, even the minimum amount due will become unmanageable, creating a financial crisis for the remaining year.

Create a Personal Layaway Plan

If you want to keep a budget, and reduce credit card spending, the time to start is right after the holidays are over. For most of us this includes the week of great sales immediately after Christmas (in the US it’s the after Christmas rush, while in the UK and Canada it’s called Boxing Week).

So in other words, right after you get over the spending hangover sometime past New Year’s Day you need to chop out an hour and figure this out.

Two ideas come to mind. One, you can create a special savings account or Holiday Club in January that you routinely put money into each month towards the next year’s holiday season; or two, you purchase a refillable pre-paid credit card that allows you to load money onto it. While the second option will cost you per each load; it also allows you to sock away money while you are already buying something at the store anyway. Just remember to take it with you for that purpose.

Avoiding the “Wants” on a Credit Card

Here’s the one part that takes practice. How to avoid putting “wants” on your credit card. I say this because I know there are lots of people out there who use their cards for monthly payments, gas, food, budgeting and so forth. Do not be tempted pull out the credit card for a splurge should you have it. Also, do not have access to the credit card numbers in case you try getting a “want” online. So no putting the iced card close enough to the top to read the numbers. And no calling for the numbers if you sent the card away either.

If you really want those shoes, make someone else buy them for you as a Christmas present. You’re worth that much.

Any other ideas out there?

William Swan, writer

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