(WTNH) — It’s easy to get carried away with the credit card during the holidays. Now, many people are dealing with piling payments. Financial Consultant John Caserta of Caserta and de Jongh LLC shares his tips on paying off consumer debt.How much debt did consumers rack up during the 2017 holiday season?
- According to a recent survey by MagnifyMoney, the average consumer added about $1,054 of credit card debt during the 2017 holidays.
- This year’s debt amount is up from $1,003 in 2016 and $986 in 2015.
How long will it take consumers to pay off their 2017 holiday debt?
- Assuming an APR of 15.9% and minimum payments of $25/month, it would take over 5 years and cost nearly $500 in interest.
Strategies for paying off debt
- Make at least the minimum payment on each debt.
- Sort debts by interest rates.
- Apply any extra payments towards debts with the highest interest rates.
- Make a note of when introductory interest rates expire.
- Sort debts by balance.
- Tackling smaller balances first and paying them off can help you build momentum and confidence.
- Consolidate and/or transfer your debt to lower interest rate cards.
Strategies for avoiding consumer debt during the holidays
- Build holiday savings into your monthly budget.
- Set spending limits on gifts and stick to them.
- Have a repayment plan in place prior to making a big purchase.
- Don’t be fooled by 0% interest – when the introductory period ends, the interest is typically applied to the original balance on the card!