How to Pay Off your Credit Card Debt after Christmas
Spent way too much this Christmas???
As the festive season draws to an end, many Australians will find themselves feeling stressed and defeated as they fall into financial debt as a result of their extravagant holiday spending.
Recent studies have shown that Australian spendings accumulate to approximately $25 billion each and every Christmas. If we take a closer look into these figures, it’s been estimated that the average Australian woman will spend a whopping $1406 over the holiday period, while the average man is likely to chalk up $1241. Sadly, studies also show that the majority of these individuals will experience the dreaded “buyers remorse” once the New Year commences.
AMP conducted a recent survey in which it was found that 75% of participants regretted the amount of money they spent over Christmas last year, while more than half of those surveyed couldn’t even recall what their total expenditure might have been. With these statistics in mind, it makes sense that thousands of Australians will find themselves snowballing into debt or relying on credit cards to pull them through the holiday season. A similar 2017 study showed that a massive 40% of Christmas spending was linked to credit cards, resulting in a total figure of $29 billion.
It’s no secret that it can take a huge amount of effort for some people to pay off their credit card debts, particularly as interest rates continue to soar. But that doesn’t mean that all hope is lost if you’ve found yourself in credit card crux, as you do have options to get back on top of things by refinancing your existing loans and consolidating your debts.
Debt consolidation is an increasingly popular strategy in which you have the opportunity to roll multiple existing debts into a single, new debt. Your best bet is to ensure your new debt has a lower interest rate than your existing debt, meaning that your payments will become more manageable and your payoff period will be shorter.
If you’re a homeowner, you are able to take out a loan on the equity of your property. This loan is a lump sum with a fixed interest rate. You also have the option to take out a line of credit on your property, working similarly to a credit card with a variable interest rate. Both options allow you to use that money to pay off your credit card debt quickly and painlessly.
Similarly, you can also utilise a personal loan to consolidate your credit card debt. This loan should grant you a lower interest rate on your existing debt, meaning you are able to pay it off faster. If you have a low credit score, it is recommended that you seek advice from a credit union, as they are more likely to offer flexible loan terms and lower interest rates than standard banks and online lenders.
If you have any further questions about tackling your credit card debt or you would like to get in touch to discuss your options, feel free to contact Boss Money for expert advice and leading knowledge.
Contact Boss Money at www.bossmoney.com.au or Tom@bossmoney.com.au or 0476 111 000.