Avoiding debt from holiday credit card bills

CHARLOTTESVILLE, Va. (WVIR) – It’s that time of year again. A lot of us are starting to see our holiday spending totaled up on credit card bills. It can be a bit scary, but it can all be managed if you take the right steps.

“First week of January, bill comes in and you’re sitting there saying ‘Well, maybe I don’t need to use all my savings to pay this off, I’ll just pay that little section there that says minimum payment,’ and a lot of people don’t realize that that does not absolve you of the interest rate on that credit card,” Emergent Financial Services CEO Alexander Urpi said.

Urpi says that if you only pay the minimum amount, it can cause long term problems.

“You’ll be surprised how many times people actually have sitting in their checking account what’s needed to pay off their credit card debt, but they don’t realize just what the implications of that debt are,” Urpi said. “The credit card company is hitting you with 16% annualized interest over every single month. and before you know it that’s ballooned to a huge amount.”

He says that ideally you want your credit card balance to be at zero by the end of each month.

“Don’t pay the minimum, pay the entire balance to get your balance back down to zero, but as anything over zero when it carries over the next month is being hit with that extremely high interest rate,” Urpi said.

Urpi recommends cutting down own spending for the month of January to get your credit back in order after holiday spending.

“The key thing is to sort of figure out what you need to do this month budget wise to get that paid off. Cut down this month to just move. Say to yourself, ‘Hey, I absorbed my fun expenses in December, I need to have a little less fun in January.’”

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