Financial management is critical to your current wellness and future success. It all starts with education and information on managing your finances, and Altra Federal Credit Union can help.

Question: The holidays are approaching, and my credit card debt is higher than I’d like. How can I tackle credit card debt before the holidays?

Answer: The holidays are a time of joy, family, and celebration – but they can also come with a big price tag. And if you’re already carrying credit card debt, the added pressure of seasonal spending can turn that financial burden into a full-blown snowball. Taking a few steps now could mean a lot less stress when the bills arrive in January. 

Step 1: Get a clear picture of your debt

Start by listing all your credit card balances, interest rates, minimum monthly payments and due dates in one place – seeing it all laid out can make the situation feel more manageable.

Step 2: Build a bare-bones budget (just for now)

For the next few months, consider trimming non-essential spending. Think: eating out, streaming subscriptions, impulse buys. Using a debit card instead of a credit card can help you avoid overspending and impulse buys. Funnel those savings toward your credit card balances. 

Even an extra $50 a month can chip away at your debt and free up room in your budget for holiday expenses without relying on plastic. Using any extra money, extra funds, or extra income – such as bonuses or side gigs – can help you pay off debt faster and free up more money in your budget. 

Step 3: Choose your payoff strategy (including balance transfers)

  • Snowball Method: Pay off your smallest balance or lowest balance first. This gives you a psychological win and momentum to keep going. Once you pay off a debt, roll the entire balance you were paying on that debt into the next smallest balances. 
  • Avalanche Method: Avalanche methods focus on paying off debts with the highest interest rates first to minimize total interest paid. This saves you the most money over time. 
  • Balance Transfer: Consider transferring your high-interest credit card balances to a card with a low fixed balance transfer rate. Check with your financial institution for balance transfer options with no associated fees for new or existing accounts. Some may offer fixed balance transfer rates for the life of the transferred balance, which remains in effect until your balance is paid in full.

Some balance transfer cards may offer a 0% introductory APR, typically for 12 to 18 months. But be aware: balance transfer fees apply and are usually 3% to 5% of the transferred amount. And after the promotional period ends, the interest rate jumps, often to 20% or higher, so it’s crucial to pay off the balance transfer within the interest-free period for these types of cards to avoid high finance charges. 

Step 4: Pause the swipe

If you’re actively paying off credit cards, try not to add to the balances. This might mean hitting pause on your credit card use for now. Use cash, debit, or a prepaid card to keep spending in check. 

Step 5: Get help if you’re stuck

If your credit card payments are more than you can handle – even with a plan – it might be time to get professional support. Check with your financial institution for financial education resources, information, and assistance, they may offer certified financial counselors and Debt Management Programs that could potentially help you pay off your credit cards in 3-5 years with reduced interest rates, waived fees, and one affordable monthly payment. You stay in control, and you get guidance every step of the way.

Altra Federal Credit Union offers an array of financial tools and information to help you manage your money. For more, visit them online, visit one of their Clarksville locations – 1600 Madison St. or 2625 Wilma Rudolph Blvd. – or call 800-755-0055.

Brian Selph is Retail Market President, Altra Federal Credit Union. Portions of this article are shared by our partners at GreenPath Financial Wellness, a trusted national non-profit. Content is for informational purposes only and is not intended as legal, tax or financial advice.