By Ashley Hayes (Contributor) – Email
Print Edition: January 7, 2015
There’s a reason January can be a depressing month; the joy and excitement (and possibly family drama) of the holiday season is over and all that’s left is a stack of credit card bills. While saving year-round for holiday shopping would be the most logical approach to avoiding holiday debt, it isn’t always a viable option.
During the holidays, it is easy to just say “eff it” and go crazy buying gifts for others. Even with a solid gift-giving budget, you need to remember to account for all that other “stuff” that happens during the holidays: parties, secret Santa exchanges, those people who buy you gifts and force you to run out and buy them something so it’s fair … All the little, unexpected stuff can add up to even more than the gift-giving portion of the holiday season!
I’ve had bad credit card debt and wound up going through a credit counselling agency to help get my debts paid. It was by far one of the worst decisions I ever made and it has taken six years to get my credit history back to where it should be. That said, I still use credit cards and definitely relied on them during this holiday season. Throughout the credit hell I’ve experienced over the past few years, I’ve learned how to be smart with my debt and how to use credit cards to my advantage.
If possible, get a credit card that gives you some sort of benefit. MasterCard, VISA, and American Express offer cards that give you cash back on a yearly basis. As a student, free money appeals to me, so all my holiday spending this year went onto my MasterCard. I’ve earned over $60 in cash back, which will come to me with my statement this month.
Any extra income (bonuses, odd jobs, etc.), income tax returns, and those quarterly GST rebates can all be used to make dents in the debt you’ve accumulated over the holidays if you aren’t able to pay your cards off in full when that dreaded January statement arrives. The key to any type of debt repayment is to have a plan. Set a goal for when to have your debt paid and calculate what your monthly payments will be. There are a tonne of websites that have loan calculators where you can input your debt and it will let you know what your payments need to be for the timeline you have set yourself.
At the end of the day, the holiday season is supposed to be about spending time with loved ones, and if a little holiday debt helps you achieve that goal, then is it really bad debt? If it doesn’t stress you out until the bill arrives, then I certainly don’t think so. But once you realize you have to actually pay for all those gifts you bought last month, make sure you come up with a solid plan so you have a zero balance before December and can do it all over again!
