ROANOKE, Va. (WFXR) – Many people will enter 2023 with a lot of holiday debt. According to a recent study by Lending Tree, Americans took on an average debt of more than $1,500 during the holiday season, a 24 percent increase compared to the 2021 holiday season. Now, borrowers are looking to repay that debt quickly.
Nathan Grant, a financial industry analyst for MoneyTips, said, “Paying interest on a holiday loan or debt is like throwing money away. So paying off the high interest debt at the beginning of the year will help you prosper going forward in 2023.
Grant said one way people can free up more money in their budgets is to cancel unnecessary subscriptions.
“We are all guilty of it. You forgot that you signed up for that service and your notifications have run out and you are not using it now. Look at all the things you are spending your money on each month and if you can cut back on a few of those things and free up some extra money to can go quickly to pay off your debt,” said Grant.
Another way borrowers can start paying off debt sooner is by cutting delivery programs. Grant said, “A lot of times you’ll be surprised at how much (the product) really is. It’s probably going to go down at the beginning of the year while you’re trying to pay off some of your debt over the holidays.”
According to the financial expert, people can also contact their credit card company and ask them to change the due date if the due date falls at the same time as the mortgage, rent , or car payments.
Grant, “You may be paying the lowest price. And the one thing with credit card debt is that if you only pay less every month it will feel like you don’t have it, you won’t make progress. You want to pay as much as you can so you can pay that off and over time save money on the interest on that debt.
Some borrowers consider consolidating their credit card balances onto one card. Grant says this option can make the debt settlement process easier, but you want to make sure you’re putting the balance on a credit card with a low interest rate. He said, “Even if you can transfer part of the high interest balance to a card like zero percent APR for a year or more, it’s more time for you to be able to pay that without paying interest. up to.”
For more tips to help you get out of debt fast, visit MoneyTips website.