Getting out of credit card debt after holiday season

Going back to work after the holidays can be hard for many, but perhaps an even bigger challenge is digging out of all that holiday shopping debt.

If you've been avoiding your bank and credit card statements, today is the day to confront them.

Many have vowed to get your finances together in 2020 and getting out of that holiday debt is a good first step.

The holiday shopping season is over and some folks admit, they may have gotten a little out of hand.

"I did just look at my credit card statement the other day and I think my heart sank a little bit," said Morgan Miller.

"It's hard," said Ashley Keys. "You look at it like, 'Woah, what did I buy?' Hopefully, you can make the payments."

"The fun of the holidays kind of slipped away when you saw the bill," said Joe Maltby.

According to a shopping study by Nerd Wallet, roughly 48 million Americans are still paying off credit card debt from the 2018 holiday season.

Carter Cofield, a financial adviser, says year after year, holiday debt for his clients is getting worse because of the ease of making purchases with just a few clicks

"The scary part is, a lot of these people are millennials," Cofield said. "All you have to do is say, 'I like that, boom. I like that, boom,' and then next thing you know, thousands of dollars of credit card debt."

Since cell phones seem to be pushing people deeper into debt, Cofield suggests those same phones that pulled you in the red to get you back in the black with easy to use money planning apps.

He says one of his favorite apps is Tally, which helps consumers stay on top of their credit cards and does the payment management for you.

There's also the app called Acorns, which helps consumers invest and save their spare change, putting that money toward paying off credit card debt.

But if you'd rather tackle debt the old fashioned way, Cofield says identify the card that's haunting you the most and leave it at home.

"The first thing is to stop using it," Cofield said. "I know it sounds like an easy tip but if you bring the credit card out the house you're going to use it."

And don't try to tackle all of your debt at once. Focus on one credit card at a time.

"Find your credit card with the smallest balance and pay that off first," Cofield said. "It gives you positive momentum. That's one card down, I can go to the second. You'll be out of credit card debt in a matter of months."

Also don't depend on your tax refund check to get you out of the hole. Cofield says even if you're just paying off a little at a time, it's better than putting off the debt entirely.

"As you know, credit card interest rates are really, really high. If you wait three, four months in March, April to get your refund check, that's four more months of interest," Cofield said. "Paying it off as early as possible is in your best favor."

Cofield says you can try to negotiate a lower interest rate with your bank or credit card company as well. He says typically companies would rather work with you on the rate than see you go and may lower that rate for a certain period of time to get you back on track.

You can also ask your credit card company to raise your credit limit so that your credit score isn't hit too hard from the debt. But he says only do that if you're responsible enough to not spend more.
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