Here’s how to course correct if you overspent and are now in debt.
Transcript:
CONWAY GITTENS: If you overspent during the holidays then give us some tips. What do we do? What do we do now? But tackling the debt that we racked up during the holidays?
TIFFANY ALICHE: Well, first, like I said, you have to make a list of like who do you owe and what did you spend just so you can get a clear picture. Right? then I want you to create a plan of how am I going to pay these things off? Maybe you can return some of those holiday gifts. Like, I was just looking in my closet and I was just like, I had these big plans for decorating my tree differently, and I didn’t. So I still have some of the holiday decorations left over. And potentially, can you send some of those things back? Did you get gifts that you’re not using that you can return and get that money back to use to pay down some of your debt? Before we know it, tax season is going to be upon us. April is not that far away. I would make a plan now that if you’re going to get a refund, what can I do with that refund to start paying that back. Some of this debt and at the very least, try your best to stop digging.
Because what do you do when you’re in a ditch? Put the shovel down. Your credit card might be a shovel, and you might need to put it down temporarily. And say, I need to manage without it so I can actually pay off that debt. And lastly, if your credit score is decent, you could do something maybe called a balance transfer card. This is when you transfer your balance from one card that has a higher interest rate to ideally, a card that has a promotional 0% interest rate for sometimes up to two years almost. And this is how I paid off my $35,000 of credit card debt in my 20s. I did a balance transfer card. Now, oftentimes there is a balance transfer fee, typically around 3% But even sometimes, though they have promotions for that too. But doing that means that when you’re paying off that card because you don’t have interest, 100% of your money goes to your principal and you pay it down faster.
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