RALEIGH, N.C. (WNCN) – The holidays have wrapped up. Now the reality of paying for it all sinks in.
The National Retail Federation estimated the average person would spend at least $1,000 on gifts this holiday season. Many spent a lot more than that.
So what’s the best way to get rid of that debt? There are several steps to take.
Financial experts said it’s so easy to overspend during the holidays even as many struggle to pay off the previous year’s debt. A big culprit is buying gifts with credit cards. Those charges can accumulate fast.
The federal government said there’s a widespread issue with the amount of credit card debt people owe in the United States. It amounts to more than $1 trillion.
“I got caught up in the sales of stores around the holidays, shopping fanatic,” said Octavia Dozier, who once had 21 credit cards.
That’s typically how it starts. It then goes downhill from there. Suddenly, a person can be stuck with paying off thousands in credit card bills.
Before beginning to pay it off, take a moment to think and form a strategy.
“The first thing is to develop a plan,” said Alyssa Parker with the Better Business Bureau of Eastern North Carolina. “Take an inventory of how much debt you have and really kind of think of how much you can pay (and) when you can pay it.
“The quicker you can get out of it, the quicker you don’t have to worry about anything.”
- To get rid of debt, the BBB recommends a cold-turkey method:
- Put credit cards away to avoid creating more debt
- Stay out of stores and away from online shopping
- Unsubscribe from shopping emails to avoid temptations
- Try to pay a little extra on top of the monthly minimum
- Try to use cash more often because it makes people likely to spend less
“If you aren’t swiping that plastic you actually have to hand over cash and it makes more of an impact,” Parker said. “When you are physically handing over money to someone and somebody’s taking it away from you.”
Getting rid of debt is getting to be more and more difficult.
A survey from Comparecards found that, over the past six months, just 26 percent of people paid their credit card statement in full every time. That’s compared to 36 percent last year.
Financial experts estimate the average person carries between $6,000 and $7,000 in credit card debt.
One more tip: it’s never too early to start thinking about the next holiday season. Experts suggest opening up a savings account as soon as possible. Those extra funds will avoid a new round of financial headaches in 2020.
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