Christmas debt, how it affects your credit and what you can do!

Happy Holiday's Red Phoenix Nation! Hope you're looking forward to 2012 and ready to go!!!

Christmas in this economy can be challenging for a lot of us, we all want to have a nice holiday. I know image is important when it comes to buying presents and we all have pride! Here is how the credit crunch can affect your credit and how you might be able to rebound sooner than next Christmas.

Anytime you use credit and get your balances close to your max you are losing around 30-40 points. Not to mention if you were already keeping larger balances before Christmas, now you're really up there. Now your score goes down, your stress has gone up. Minimum payments have gone up, the struggle on how to pay it off or to make the payments and what to do builds and builds. Here is a couple thoughts that may take some of the pressure off you. I like to keep it simple, seems its easier to accomplish that way. YOU HAVE TO PLAN!

Make a list of what balances are and look at what the interest rates are. You have to do that in order to make a plan to help you lower those balances and reduce the debt trap pressure. Once you have that in front of you, I tell friends to pay off the smaller balances first. They are the ankle biters as I call them and they seems to never go away. Make your minimums on the others, but knock down or knock off in order from smaller to larger balances one at a time. By doing that you're eliminating interest charges and getting rid of a payments. Not to mention it seems easier to pay off the smaller ones first, once they're gone you'll have more money to put towards the larger cards.

If you think you'll ever pay off your cards by just paying the minimums on all your debt, you won't and that plan doesn't work very well or often. It doesn't seem to work very well to send X amount to Visa then send Y the next month. In a sense just doing what you can each month, not a good plan either. Keep it simple and make 2012 the year to get you out of debt so you can transition your own economy to one of great health once again! If you need me, I'm always around...

john@redphoenixco.com
www.redphoenixco.com