Holiday Credit Card Debt - How to Survive and Thrive After the Season

The holiday season brings cheer, good tidings, and warm family memories. Unfortunately, for many Americans, the post-holiday season brings more credit card debt, and the stress and depression that accompany it. According to the National Retailers Federation, holiday spending increased by fifty-one percent in the ten years from 1997 to 2006. The Federal Reserve reported in June of 2007 that Americans' revolving debt, which includes credit card debt, reached a stomach-knotting 904 billion dollars. If you are someone with more than your fair share of that revolving debt, do not despair. Create a plan to get back on track, set good goals, and free yourself from that post-holiday financial stranglehold. The following paragraphs may help get you started.

First and foremost, you must take stock of your financial situation, from top to bottom. It is astonishing how many people do not know the details of their credit card debt. How big is it? What is the Annual Percentage Rate on each of your cards? Is that Annual Percentage Rate fixed or variable? These are things you must know if you want your situation to improve. If you don't know where you are, you sure as heck don't know where you're going.

Be sure to look over your other areas of spending, as well as your income. Where can you make cuts? Is there a way for you to make more money? Remember that getting out of debt is a huge step toward gaining financial freedom.

Now that you know where you stand, create a budget, and stick to it. A written budget will help you analyze your finances; focus on reallocating your spending to put more towards paying off your credit card debt. When creating your budget, make sure that you have a copy of all your bills and credit card statements in front of you. You should have your paycheck stubs or income statements in hand, as well. This will help you be aggressive, but realistic, while setting your monthly financial goals.

If you work hard and pay off your cards before the next holiday season, that's great! If you then go right back into debt because of the holiday season, that's just maddening. There is, of course, a way to avoid that frustration. Decide on a reasonable amount you will spend during the holidays. Divide that number by the twelve months in a year. The result is the amount of money you should earmark each month for your Holiday Fund. Add that amount to your monthly budget; consider opening a bank account just for your new Holiday Fund. When the time comes, you will already have your spending money.

The main point of this article is that if you have a plan - and stick to it - you can defeat your credit card debt. Understanding the details of your credit card statements, creating a budget, and starting a Holiday Fund are all little things that will help you make your next holiday season the best one yet!