If they haven’t done so already, everyone will soon be taking down and putting away their holiday decorations and settling in for 2015. Within a week or two the credit card bills will start to roll in, reflecting the heart-felt gifts you gave along with the amount you paid for them.
According to the National Retail Federation, in 2013 Americans spent 602.1 billion for Holiday items including gifts, supplies, and decorations for Christmas, Hanukkah, and Kwanza?
Sure you had a somewhat ideal budget before buying, but then you saw that thing that you had to get dad or mom, and there was that little extra thing for your brother or sister. And you didn’t add your child’s teacher or your co-workers to your budget, but you just had to get them something as well. You soon realize all those small individual items added together were more than you actually thought you’d spent, not to mention the interest you’ll pay for carrying over your balances.
Don’t get overwhelmed, make a Power Payment Plan! Having a plan will relieve anxiety and put you back in control of your money. There are two basic ways to do this; one is called the Snowball Plan and the other is the Power-Pay Plan.
The Snowball Plan focuses on paying off the smallest balance accounts first, then using what was being paid on the small balance account to put extra on the next highest balance account until all your credit cards are paid off. This builds motivation to stick with your plan by seeing fast results. If you have major credit cards with somewhat low interest rates, this plan might work better for you.
The Power-pay Plan focuses on paying off highest interest rate accounts first, then using the payment that was being paid on the highest rate account to put extra on the next highest rate account until all your credit cards are paid off. This pays off the debts you are paying the most finance charges for first. This plan may not pay off accounts as quickly as the Snowball plan, but you see smaller balances faster. If you have department store cards or cards with higher interest rates, this plan will help you save the most in interest, resulting in lower cost over the long run.
You will need to list out your debts based on which plan is right for you. See the examples below. When the first account on your list is paid off, take that payment and start applying it to the next account on your list. Anytime you can add extra, great. But make sure you are paying at least the minimum on all your accounts while paying on your Power Payment Plan.
Snowball Plan
| Credit Card | Balance | Minimum Payment | Interest Rate |
| Major Card 1 | $300.00 | $15.00 | 9.00% |
| Major Card 2 | $400.00 | $15.00 | 9.99% |
| Major Card 3 | $500.00 | $20.00 | 10.99% |
Power-Pay Plan
| Credit Card | Balance | Minimum Payment | Interest Rate |
| Dept. Store 1 | $800.00 | $35.00 | 26.99% |
| Dept. Store 2 | $600.00 | $25.00 | 24.50% |
| Major Card 1 | $400 | $15.00 | 21.99% |
Both methods require you to be disciplined. If you looked at your spending plan (budget) and your new credit card payments, and you cannot afford everything, contact an Apprisen Representative via online chat or call 1-800-355-2227 to see how we can help you get on track, and stay on track.
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