How to rid yourself of the holiday spending hangover
They say today, Blue Monday, is the most depressing slot on the calendar.
Yet, despite all the theories why this is – we’re in the depths of winter, it’s only a few weeks until Valentine’s Day, etc. – no one ever mentions the holiday spending hangover.
As you’ve most certainly learned, this is the week many Canadians will receive their stack of holiday credit card bills. And, if you’re like the high percentage of consumers who typically carry a balance, you’re hip to the grim fact that these debts are soon due.
So, what to do if your December holiday spirit’s gotten you into a January holiday bind?
“This is a good time to jump-start your financial situation (and) recommit to making some good financial decisions,” Laurie Campbell, executive director of not-for-profit Credit Canada, tells the Globe and Mail.
“Interest rates are likely going to increase in mid-2010, so you want to take advantage of this low-interest-rate environment today.”
Campbell offers the Globe’s Roma Luciw a few tips for Canadians to get rid of that holiday credit card debt. Some of the highlights include:
1. “Get creative with your household bills” – Switching to a no-fee bank plan, she suggests, can save you about $300 a year. Renegotiating your cable/phone/Internet subscription can pocket about $400 a year, too.
2. “Budget is not a dirty word” – Evaluate your day-to-day life to find the usual excess-spending suspects. Bring lunch to work. Take public transit to avoid parking costs. Shop at a less expensive grocery store. That kind of stuff.
3. “Pay off the highest-interest credit cards first.” – A smart tip many Canadians forget. The bulk of those store credit cards you own carry a much higher balance than your traditional bank card. Retail cards, according to Campbell, carry an annual rate of about 28.8 per cent, much higher than the 19-20 per cent bank cards do. Make dumping store credit card debt a priority.
Campbell also points to just how dreadful carrying a balance for too long can be. If you only make the minimum payment on your card(s) each month, she notes, you’re actually paying more than three times the value of each purchase you make.
If you’ve carried a debt over from the holidays, how are you scrambling to get out from under it?
By Jason Buckland, MSN Money
Posted by: jenn | Jan 20, 2022 11:57:39 AM
Which holiday period! :) Alas, I have been chasing this for such a long time, I sometimes feel my debtors are a part of my family and I should send them a card....
Posted by: Bonaventure | Jan 24, 2022 2:39:53 PM
Canadians have to become aware of what is driving them into debt.
Over the last 5 years I have identified the number one reason that Canadians are digging themselves deeper is the DEBIT Card.
All I need to see is how much a person uses their debit card for me to know if someone is in financial trouble. Only about 5% can handle using their Debit Card in a responsible manner.
The reason for this decline is that the Debit Card take away the emotion of spending money.
Everyone is comfortable with a certain amount of money in their bank account, when there is "extra" money the urge to spend is too great. But when the Credit Cards bills arrive there is not enough to pay the full amount so the person make the minimum payment.
Its a treadmill that Canadians cannot get off. Consolidating debt will not fix the problem.
Only cutting down on Debit Card use is the answer.
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