Tips for Paying Off Holiday Credit Card Debt
The holiday season is probably the most joyous time of the year. People buy gifts and decorations, go on vacations to enjoy and release their stress. A lot of people easily tend to get caught in overspending during the holiday season. Once the holiday hangover is finished and people get back to day to day life, they feel the punch from the holiday season in the form of a credit card bill.
If you too are worried about paying your travel credit card bill, don’t worry! We have compiled a list of important tips that will help you to pay off your holiday credit card debt.
Assessing your Financial Situation
The first and the most vital tip to pay off your holiday or travel credit card debt in UAE is to assess and analyze your financial situation. Reviewing your financial situation that essentially includes your monthly budget along with long and short term financial goals helps to identify the tolerable credit limit. Cardholders can make a list of all the outstanding debts, minimum payment amounts, applicable rates of interest and the time horizon in which you would pay the outstanding debt.
Choose the Correct Payment Strategy
Paying your holiday/travel credit card is not as simple as it seems. Cardholders should follow a well-structured strategy in order to make the repayments. Cardholders should consider paying the bills of those credit cards that have the highest rates of interest. Initially, it might appear to be difficult however; cardholders can pay the minimum amount in order to witness their progress on the way of paying off debts. Making timely payments will not help you to get rid of outstanding debts but it will also maintain your credit score.
Review your Holiday/Travel Credit Cards
Cardholders should be aware of the different pros and cons of their travel credit cards to avoid a hassle in the future. Cardholders can eliminate credit cards with high annual fees and rates of interest and focus on availing more reward points to extract the maximum benefit out of their travel credit cards.
Keep a Track of your Credit Rating
Credit cardholders should lay emphasis on maintaining their credit score as irresponsible credit card usage might disturb their credit rating. Making timely repayments of your debts will ensure that your credit rating is not affected. After paying off your holiday/travel credit card bill cardholders should re-assess their credit ratings.
Market and shopping malls might appear tempting during the holiday season. However, in order to avoid trouble cardholders should avoid overspending. Minimizing unnecessary expenses like dining out, movies, and clothing can affect your budget in a positive way. Making simple lifestyle changes can save a considerable amount of money that will help you to manage your expenses.
Save for the Next Year’s Holiday Season
Another useful tip that will help you to pay off your travel credit bill in UAE is saving to fund the holiday season. Saving small amounts of money periodically will reduce the requirement of credit to fund your holiday season. Assess your expenditure in the holiday season and start planning for the next year.
The holiday season witnesses an exponential rise in the prices of gifts and other products that are sold during that time of the year. Shopping early will save a lot of your money and you can evenly distribute your expenditure throughout the year instead of bearing it all at once. This approach will not only keep your holiday/travel credit card bill on the lower side but will also prevent overspending.
Don’t Buy Expensive Products unless you’ve got a Plan in Place
The most common reason behind the credit card trap is the desire to purchase expensive gifts that are unaffordable. Although the holiday season offers high discounts that appear tempting, cardholders should plan their purchases to make sure they do not end up in a debt trap. The correct approach to doing this would be planning and saving instead of opting for credit in the UAE.
Make use of Credit Card Reward Points
If you are stuck in a debt trap due to irresponsible credit card usage you would have accumulated a lot of reward points. Using reward points to repay your travel credit card bills is the best way to prevent your finances from crashing down. If you have been using a credit card with a high rate of interest, you can transfer your balances to a credit card with comparatively lower rates of interest.
The tips shared in the article will help you to pay your outstanding credit card bills. However, if you are unable to find a practical and realistic way to pay your credit card bill you should consult an expert or counselling firm. Consulting experts will help you to prepare a plan to make credit card repayments in UAE.