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4 ways to avoid a holiday credit hangover

If you overindulged in spending during the holidays, there are steps to prevent a sick feeling when you get your new credit card bills.

By MSN Money Partner Jan 4, 2013 6:35PM

This post comes from Jeanne Kelly at partner site logoThe past couple of weeks have been filled with holiday parties and eggnog and turkey and gifts and good cheer. If you are like most people, you might have reached for an extra serving of turkey or grabbed an extra cookie when no one was looking. But now that the indulgence is over, something else is about to strike: the holiday credit hangover.


Image: Woman with paperwork (© Big Cheese Photo/Jupiterimages)Will you suffer from it?

In the weeks leading up to Christmas, many people pulled out their credit cards to buy the perfect gifts for the people on their list, and the perfect outfits to wear to the parties -- and let's not forget the mountains of food purchased for those big family get-togethers.


But now, many people are starting to feel the sting of a holiday credit hangover as their generous spending comes due: Those gifts and outfits and food purchases paid for by credit cards need to be paid off.


The credit hangover will hurt when you get your first credit card bills in January. If they aren't paid off, they will hurt worse when you get your credit card bills in February, March and for as long as it takes to pay them off.


So how can you avoid a holiday credit hangover? Here are four ways to take action right now:


Create a 'pay off those Christmas bills ASAP' budget.

While you might have a budget already -- and you should have one! -- these holiday bills could require slight modifications to your budget to pour more money into paying them off. That means fewer dinners out with friends or fewer extra-large lattes from your favorite gourmet coffee shop. It's a short-term sacrifice to ensure that you don't feel the long-term pain of high interest or late-payment notices.


Pay some of your bills right now, before you get a credit card statement.

This is a great way to soften the blow. If you can put aside a few dollars now, even before your credit card statement arrives in the mail, it will be like a little gift to yourself when you open your bill and know that it is less than what is printed because you already sent in some money.

Review your credit card statements when you get them in the mail or online.

When your bill arrives, take a close look at it. Can you account for everything? Make sure that you know what each item is and investigate the unknowns carefully. Compare against your receipts and ensure that you were charged the right amount. This is also a quick way to make sure that an identity thief isn't trying to bury a purchase somewhere in your long list.


Pay your credit card bills in full as quickly as possible.

The worst part of the holiday credit hangover is if a credit card bill can't be paid in full in January. The interest charged on the remaining balance in February (and March, etc.) can suddenly make the holidays seem much less joyous -- and far more expensive.


And remember that it's better to make a minimum payment than to avoid the debt altogether, which can damage your credit scores and raise your interest rate to the penalty annual percentage rate.


This past holiday season was a time to build wonderful memories with your family and friends. But now that the new year is here, it's time to take action to make sure that the holiday season remains a wonderful memory and doesn't lead to a nasty holiday credit hangover.


More from and MSN Money:

Jan 7, 2013 1:02PM
How about live within your means to begin with if you didn't have to cash to pay for something you couldn't afford it!People need to stop the mindset that they are entitled to have what they want when they want it even if they can't afford it and then wonder why they are going broke,and expect somebody else to pay for it of be forgiven the debt.
Jan 4, 2013 8:40PM
welcome to the united states of monopoly where everyone gets to play, only to end  where one ends up with all the money and everyone else goes broke . end of game.
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