ATLANTA — About 36% of people took on extra debt for the holiday season, with an average of $1,181 according to a LendingTree survey.
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The Chief Credit Analyst at LendingTree, Matt Schulz, told Channel 2 Action News that is a lot of money considering how tight budgets are for many people.
Channel 2 Consumer Advisor Clark Howard said only paying the minimum due each month on credit cards will leave you feeling like you are not making a dent in your balance.
“I want you to take all your credit card statements and see what you owe on each one, write it down and put the interest rate next to each card and the amount,” Howard said.
After that, start paying the minimum on the cards with the lower interest rate and send as much money as you possibly can each month to the one with the highest interest rate.
He said sticking to your plan is the best way to pay off your balances.
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Ama Yates Ekong and Deon Butler faced a mountain of debt from the 2023 holiday season.
“Getting gifts, travel for the holidays. So, things just started to build up over time. It became really overwhelming,” Ekong said.
Butler told Channel 2 that gifts made a big dent in his budget. That, along with recently buying homes, left both facing big-time debt.
Some of that debt lives on high-interest rate credit cards.
“My limits were pretty high, so it’s just you just swipe and swipe and swiping,” Ekong said.
Ekong says when she started a new job that came with more money, she started spending more.
“Then I start to get a little lax and just swipe too much. And it was like $2,000 turned to $6,000, $6,000 to $7,000,” Ekong said.
Butler didn’t want to pull from his investment accounts, so he reached out to Money Management International for help.
MMI is a nonprofit credit counseling and housing organization. Tara Alderete is the director of enterprise learning at MMI.
“We saw the prices go way up on everything. And everybody’s been sort of waiting for them to come back down, and it’s not happening. And so, what we’re seeing is rising debt,” Alderete said.
She said even if consumers have a plan for gifts during the holidays, there are other costs you might forget to calculate into your budget.
“They don’t necessarily think about the cost of wrapping paper and decorations and travel and cookies for neighbors ... and then they’re in December and it’s like, my gosh, I better just swipe this credit card,” Alderete said.
Ekong worked at paying down her debt.
“I see the debt going down, I see the progress being made. And I’m really excited to actually be 100% credit card debt free,” she said.
Howard said if you are feeling overwhelmed, reach out for help.
“I want to tell you, there are people out there who do want to help you,” Howard said. “And especially if you have a friend who’s really supportive, maybe somebody who’s also on track to pay off debt, buddy system with each other. Guide each other and encourage each other to get the debt paid off. You can do it.”
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