11 Months ‘Til Christmas…Are You Ready?

Christmas season revelers were singing, “Bring in the noise, bring in the funk.” Funk is right! But the aftermath – high interest rates on credit cards – bring a different kind of funk to the months of January and throughout the year. Spending on Black Friday may have sounded like a good idea at the time, but overspending is never more prevalent than at Christmas. The months following yuletide bliss can be ferocious, especially for those drowning in high interest credit card debt. It’s so easy to justify that extra credit card debt at Christmas, but recovering from the spending can take you right into the next Christmas season. It’s possible that high interest rates on credit cards may have more to do with winter depression than lack of sunshine.

While retailers coast into the new year on your Christmas purchases, you’re stuck in a midwinter depression, paying interest on the purchases you made the day after Thanksgiving. You know the problem, but here is something perhaps you do not know: Your case is not hopeless. Getting out of the winter credit card funk will take a little work, but we can help you create a plan to pay down debt quickly.

Our suggestion? Start with the card that has the highest interest rate and pay it off first. This sounds radical since some financial advisers may encourage just the opposite: paying lower balances first. However, a financial payoff plan that targets high interest rates first is a good idea. Why? Let’s say you pay off the card of lesser interest first. While you are doing so, the higher interest is piling up fast. You will pay more in the long run on a higher interest loan that is left idling on minimum payments than you would on a lower balance card. Paying off the higher interest loan will result in less total interest piled on to your debt. When the high interest loan is eliminated, you can then concentrate greatly on the lesser loan, even adding the difference paid from the higher interest loan, which is now happily paid off.

Paying off high interest credit cards can help positively affect your credit rating, especially if you get the balances on the cards under 50%. Outstanding debt accounts for 30% of your credit score, so paying off those high interest cards can make a difference.

Ovation specializes in diffusing the funk on high interest loans. Our payment tools will take the guesswork on how to get started.

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