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.
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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