If you used your credit cards for a majority of your holiday gift purchases, your credit card bills will be arriving in just a few weeks. Most likely, you charged purchases on at least two or more credit cards. You may wonder how you can tackle your credit card statements.
Take an inventory of your post-holiday debt obligations
Your first step should be to create a game plan to tackle what you owe.
“Take an inventory of your credit card debt,” recommends Ted Rossman, senior industry analyst with Bankrate.com and CreditCards.com. Once you have an idea of what balances are owed on what credit cards, you can put a plan into action.
Identify your credit card interest rates and balances due
Rossman says with credit card rates at record highs (the national average is 19.6%) it’s more important than ever to pay down your credit card debt as quickly and cost-effectively as possible. Rossman says some people like to sort this list from the smallest amounts to the largest, which is known as “the snowball method” of paying down debt.
“Like a snowball gaining momentum as it rolls downhill, the theory is that you’ll get progressively more motivated as you experience some quick wins and see debts falling off the list,” Rossman tells FOX Business. In contrast, he says, an alternative is “the avalanche method,” which involves sorting your debt from the highest interest rates to the lowest.
