You splurged over the holidays, and trotted out the credit cards too many times. Now, it’s time to make sure holiday debt doesn’t swamp your finances.

First, take an honest look at exactly how much debt you have accumulated. Pull all of your
current statements and write down all debt you are carrying which you don’t plan to pay off at the end of the month.

Second, look at each segment of debt and determine what the ongoing interest rate is by
individual credit card or short term financing. This will probably be the real shocker when you determine how much your debt – beyond the amount you charged – is costing you. Now, make a plan.

Determine which of your credit cards has the lowest interest rate and how high a credit limit you have on that card. Determine if you can transfer balances from other cards to that card. Typically, one larger payment versus a half dozen smaller payments on other cards will be lower.

If you have purchased items on a “90 days same as cash” or similar basis where there is no interest due if the full amount of the purchase is paid prior to the date interest kicks in and you can pay that off, set that debt aside. But, be aware of the consequences if this debt isn’t paid off in full by the date interest begins, because you may have to start paying interest on the amount of the debt retroactively from the date of purchase, not the date interest payments begin. If you don’t think you will have this debt paid in full by the time interest payments begin, plan to consolidate this debt, too.

If you have other credit sources, such as a revolving line of credit at a credit union or a signature loan at your bank, compare the rate of interest you would be paying for a single, consolidated loan there versus what you will be paying on even a single credit card.

One general rule of thumb is you will always pay a higher interest rate for credit card debt than bank or credit union debt, and the interest rate for credit cards often is in double digits when bank and credit union interest rates are in single digits.

Do your research and do what’s best for you; your financial health is an important part of your life.