Tips for smashing that post-Christmas debt fast

Too much food and wine isn't the only reason for post-Christmas hangovers. Spoiling your loved ones like they deserve, and obligatory self-indulgence at the Boxing Day sales is a recipe for debt, and often lot's of it.

A survey undertaken by credit checking company, Veda Advantage, earlier this month revealed that more than 70% of Australians surveyed would use at least some form of credit to pay for their Christmas presents and more than one in ten would rely solely on credit.

Unfortunately many Australians struggle to pay of their abnormally high Christmas-period credit card bills within the interest-free period.

But we have some great tips for reducing that post-Christmas debt fast, and doing it fast is the key.

"Reducing debt can often be a 'one step forward, two steps back' type scenario. The quicker you can diminish the debt the less chance there is of it creeping back up on you and growing larger" - according to Rate Detective Co-Founder, David Kaplan.

"Given the current economic situation the last thing we all need is credit card debt hovering over us."

Rate Detective's top tips for reducing post-Christmas debt are:

  • See a Financial planner.
  • Stop using credit NOW! You'll never get rid of that debt if you keep accumulating more.
  • Set a household budget including an amount for paying off your credit card. Use Rate Detective's simple Credit Card Calculator to help you figure out how much you'll need to pay off monthly to manage the debt. Rate Detective recommends eliminating Christmas debt no later than 31st March. Also use our handy household budgeting tool.
  • Arrange to open a Christmas savings account for next year. Most banks have them and they're a great way to prevent Christmas hangover debt next year.

Rate Detective is a simple, on-line, one-stop shop that allows consumers to compare a wide range of products including credit card options, home loans, insurance, electricity and personal finance.

Published on December 12-th, 2008 in Financial Planning
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.