Jump on Those Holiday Bills

Now that the holidays are over, you might already be getting some of those credit card bills from your holiday gift purchases. As tempting as it may be to put them off and forget about them until the new year, it’s really important to get a jump on those holiday bills right away.

According to Gail Cunningham, who is a spokeswoman for the National Foundation for Credit Counseling (NFCC), it is not uncommon for consumers to allow their post-holiday pile up. “We see people every day with grocery sacks full of unopened bills,” she says. When it comes to Christmas bills, Cunningham actually takes a pretty lenient approach. “The goal is to have all of your holiday shopping paid for by the end of March,” she says.

In my opinion, you should be planning your budget and purchases in such a way that you won’t be carrying a balance after finishing your holiday shopping. If this is not possible for you, I agree with Cunningham – at the very latest, those credit cards better be paid by the time the winter snow starts melting and spring flowers start blooming. Besides, getting your cards paid off by March is better than what Cunningham reports to have seen in her practice. “Most people shopped for Christmas 2007 while still paying for Christmas 2006,” she said. Yikes!

During the time in which you’re paying off those bills, at the bare minimum, make sure you’re making those payments on time. Added late fees on top of finance charges and, to add insult to injury, the likelihood of an interest rate increase, should scare anyone into making those payments on time. Remember, being late on one credit card can cause your interest rate to go up on another card (otherwise known as “universal default“) so don’t think you can get away being affected by just one of your creditors. Besides, late payments can have a much larger negative impact on your credit score than you might think. In fact, 35% of your score is based on your payment history. So, making late payments will result in higher interest rates that banks will charge you on your credit cards, and ultimately can make it more difficult for you to get credit extended at all down the road.

As much as you might want to, resist the temptation to delay paying down those holiday bills and credit card balances. Jump on them sooner rather than later.

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This entry was posted on Saturday, December 29th, 2007 at 8:36 pm and is filed under Debt & Consolidation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.