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Paying back Christmas debt

Posted: 05 Jan 2015

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Settling your holiday debt

With the sound of the ocean waves and the feeling of the sun on your skin already a distant memory, the reality of your Festive Season overspending might cause you to want to bury your head in the sand. But before you do, rather sit down and face the reality: If you have overspent, you need to make a plan to deal with it as quickly as possible. There is no worse stress than financial stress, and you don't want this to overshadow your New Years’ resolutions. Perhaps it’s time to go on a debt diet instead of counting the kilojoules.

Start the year on a good note

You have set yourself a budget, and it is time to cut back on things you don't need so that you can pay back what you owe. Be strict with yourself and look realistically at what you can cut down on or cut out completely. If you are unable to do that, then ask a friend or family member to help you. Together you can look at your income and expenses and see where you can make changes.

Make some sacrifices

It isn't easy making sacrifices, but think about it – would you make the amount you owe larger and the hole deeper or would you rather cut back on eating out or going to the movies? If you just follow your budget for a few months you will be debt free in a short while, and then able to have more financial freedom once again.

Explore your options

Consumers may often opt to ask a creditor for a grace period to pay back any Christmas debt. This can be a good and a bad idea. Creditors are happy to negotiate with you and discuss payment options that suit your needs. However, you must remember that even though you might be paying a lower monthly instalment – or no instalment – for a few months, you will still be charged the monthly account or service fee, as well as interest on the outstanding amount. So don't be surprised if your balance has increased after the grace period.

Check your credit report

The most important step in taking control of your credit reputation is to view your credit report. By viewing your credit report, you will be able to see your complete credit history and account information. You can register to view your Compuscan credit report at www.mycreditcheck.co.za.

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