Clear the Chaos with Practical Credit Card Tips to Overcome Festive Spending

The festive season may come and go. But often, the debt remains and even piles up. To manage the festive aftermath of your overspent credit cards, we have created a 4-step strategy to clarify the chaos. 

The main aim of this strategy is to help you make smarter decisions on your spends and select products that help you regulate spending. The objective here is to convert your short-term indulgence into long-term advantage in your favour.

The Immediate Damage Control

1. Remove saved card details from shopping apps and digital wallets. Pay manually to stop you from one-click buying hope.
2. Keep your physical card away in a safe place or at a place that is hard to reach. Instead, temporarily use the debit card for daily expenses. This way, you consciously spend the actual money you have. 
3. Reduce the spending limits to a nominal amount on your credit card until the overdue balance is cleared. 

Fix the Damage Strategically

1. Don’t fall for the minimum due trap. Try to pay the full outstanding balance, or at least 3 to 4 times the minimum due balance. 
2. Use any of the 2 - Debt Snowball or Debt Avalanche. With the snowball strategy, target the credit card with the lowest balance first for a psychological win. In the debt avalanche strategy, you can target the highest interest rate card first to save on the interest. 
3. Convert the outstanding amount into monthly instalments. For this, call your bank and ask them to convert the high-value festive purchases into monthly instalments. This lowers the interest rate. 

Restructure Your Debts

1. Consider a balance transfer where you can transfer your interest rate credit card debt to another bank at 0% or low interest for 6 to 12 months. 
2. A debt consolidation loan is another option if you have multiple cards with high balances. Apply for a personal loan to consolidate card debt into one single, lower-interest payment.
3. Reach out to your bank before you default. 

Long-term Strategy: Behavioural and Digital Controls

1. Wait for 24 hours for any non-essential purchases. Wait for the impulse to buy a pass.
2. Set a real-time alert for every purchase. Put a total spend alert as per your credit limit. 

A festival is a time of joy. It shouldn’t result in financial distress once it ends. This is why you should be more proactive in real time and get back on your financial discipline wagon after the festivities end. Enjoy while you are in control of your finances!