Best Ways to Consolidate Debt After the Holidays

The holiday season is one of laugher, joy, and cheer.  For many people it is also one of credit cards, bills, and debt.  Many people find themselves overspent after the holidays and in dire need of a solution to their financial woes.  You don’t have to be blue over all the green you spent on gifts for yourself and others; there are several ways you can consolidate the debt incurred after much holiday spending.

With credit card debt you can sign up for a credit card that has a 0% introductory APR for balance transfers.  Transfer as many of your credit card balances as you can to this credit card.  Since using the credit card to make purchases can be costly, you should shred the credit card after transferring the balances so that you don’t use it while you pay off credit card balance.

You can also consider taking out a personal loan from a bank.  Use the loan to pay off your credit cards, and then repay the loan to the bank.  If you do not have a favorable credit score, it could be difficult for you to obtain a bank loan.  However, if you are a homeowner, you can use a home equity line of credit to pay off the bills.

Keep in mind that when you incur debt to pay off other debt, you are not eliminating your debt.  Instead you are only restructuring it in a way that is easier for you to manage.

Another option is to contact a debt consolidator or consumer credit counseling company.  A debt consolidation company essentially does the same thing you would do with a personal loan.  They pay off your debts and then you to repay them.

A consumer credit counseling company works with your creditors to reduce your minimum payment and interest rate.  Then, the company comes up with a convenient monthly payment for you to pay.  You send your monthly payment to the consumer credit counseling company and they, in turn, distribute payments to each of your creditors.

When you use debt consolidation or consumer credit counseling services, your monthly payments are immediately increased.  You will no longer incur over-the-limit fees if you are over your credit limit.  There are some limitations to these two options.  You cannot use these services for secured debt.  In addition, you cannot use your credit while you are under consolidation.  Lastly, your accounts must be current before seeking these services.  For some, these are minute drawbacks in comparison to the benefits received.

These are four viable options from which you can choose to rid yourself of debt after the holiday spending.  The best one for you will depend entirely on your financial situation, your beliefs, and your lifestyle.