The holiday season is one that is associated with debt for many people. One of the issues with this is that many people have to think about is that they will have to repay that money at some point. The amount of debt that people went into for the holidays varied from as little as $1,000 while some charged more than $5,000 over the holiday.
When it comes to repayment, around half of people surveyed noted that they expect to have the debts paid off within three months. Around 29 percent said that they would need at least five months to pay the balance off.
One of the issues that comes with holiday debt is that the interest starts to add up. Credit cards have an average interest rate around 15.9 percent. This means that if you charged $1,054, you would have to pay on the charges until 2023 if you made only the minimum monthly payment of $25.
One expert notes that if you are going to pay for holiday purchases for more than six months, you should transfer the balance over to a card that has no interest rate or a low interest rate. This could save you a considerable amount of money.
For some Americans, sticking to a budget is difficult. This can make it virtually impossible to pay off holiday debts. Some people might need to file for bankruptcy to regain control of their finances. Make sure that you consider how bankruptcy will impact you so that you can decide how you will handle the situation.
Source: MarketWatch, "Here’s how long it will take Americans to pay off their Christmas debt," Kari Paul, Jan. 02, 2018