Get rid of your holiday debt hangover

The tree has long been packed away, but the festive debt lingers well into the New Year for many. But there are options to help minimise the ill effects.

Road to recovery

It’s easy to get caught up in the festive season of giving – and the Boxing Day and New Year sales that follow.

New Zealanders spent over $8b on cards in December alone. If you’re among the many who did so, your repayment habits could be crucial to your credit health.

Prioritise repayments

Paying off debts with the highest interest rates is a good idea. Attacking these first will reduce the total interest you pay compared to only making minimum payments.

It may hurt in the short-term, but in the long-run making larger repayments now will see you debt-free sooner.

Merge your debts

Taking out a personal or debt consolidation loan to pool your debts into one repayment may help relieve pressure.

You can consolidate any debts such as personal loans and credit cards as well as expenses such as overdue rent, utilities, medical costs and even tax bills.

Some lenders are more flexible and can provide custom solutions to borrowers who need help even though they may be behind on repayments or have a credit history blemish.

Consider losing the plastic

With any debt consolidation, it’s a good time to reconsider your habits. For example, replacing any old credit card with a debit card could save you from pain down the track.

Ask for help

If you’re struggling to make repayments, reach out to your utilities, credit or loan provider before things get too difficult.

You may be able to negotiate a more manageable payment plan and breathe easier once again.

Or, if you’d like to learn more about your debt consolidation options, speak to a Mike Pero Mortgage Adviser today.