Dealing with the post-holiday debt blues

By Andrew Housser

With the end of December on the horizon, it is time to face a sobering reality. Creditors want to collect on the charges you made while you were caught up in the holiday festivities.

Even the most budget-conscious consumer can get a little overzealous: the deal that was too good to pass up, the unexpected last-minute gift for a host and other unplanned expenses. If your credit card statement indicates that you leaned more toward naughty than nice when it came to spending, you can still resolve to start 2013 on good financial footing. Follow this advice to rebound from holiday-induced debt.

Put the cards away

Charging more will only increase the time you'll need to pay off the debt, which means more months of paying interest. Cut up your cards or lock them away if need be, keeping just one -- preferably the one with the lowest interest and no charges -- at hand for emergency use only. Pay instead with cash or your bank debit card. (Be careful about closing any account, however; just put cards away so you are not tempted to use them.)Pay on time

Never ignore your credit card payments. Pay as much as you can, even if it is only the minimum amount due, and pay on time. Companies can charge hefty penalty rates if you go more than 60 days without making a payment. This means your 12.99 percent APR can skyrocket to 29.99 percent. That new rate will apply to your entire balance, not just new purchases. Plus, your credit can be damaged. If you have not already created a simple budget, it's time to do so -- and then incorporate monthly credit card payments into the budget.Negotiate

You may be able to negotiate lower interest rates if you are in good standing with your credit issuer (no late payments, you haven't gone over your credit limit) and your credit rating is good. The decision-making power of customer service representatives is very limited. Ask to speak to a supervisor and cite key points relevant to your goal. For instance, you might stress that you have been a long-time customer with no or few missed payments, and are currently in a situation where you need time and flexibility to get your finances in order. Transfer to a lower-interest card

If you do not have any luck improving your rate with your existing credit card company, you may want to transfer your charges to a different creditor. The key is to not use the new or old card for purchases and add more debt. Keep in mind that if you do not pay off the full amount by the time your promotional deal ends, you will end up paying a high interest on the balance transfer, plus the new purchases. Instead of lowering your debt, you will have added to it.

Consolidate your debt

Maybe you were enticed by the discounts offered when you opened a store credit line, but now you find yourself with three different cards all charging high interest. Moving your debt to one card (preferably one with a lower interest rate) will make it easier for you to manage payments. Just make sure your credit balances do not rise above 50 percent of your available limits. If they do, your credit score will take a hit. Go on a spending freeze

You can try to make up for your holiday sins by being extra good at the start of the new year. (Think of it as a debt diet.) Make a 30-day agreement with yourself to not purchase anything for more than a certain dollar amount (say $50). If you want something that costs more than that, write down the item and wait 30 days to see if you still feel you need it. Hopefully, you will discover that you really can live without it.

Now is the time to start saving for the 2013 holiday season

Take a look at this year's total holiday spending. Divide that total amount by 12 months. This is how much money you should set aside each month for next year's holiday spending. Consider opening a Christmas club account at your local bank or credit union or an online savings account dedicated to holiday savings. You will not miss the money, and the extra savings will make next year's holidays brighter.{}