People in Texas might be in for some post-holiday buyer's remorse when they see their incoming credit card statements. Overall, Americans spent a lot during the 2017 holiday season, and many of their purchases were charged. A recent MagnifyMoney study claims that the average American consumer put themselves a little more than $1,000 in debt due to holiday spending. Furthermore, many of those people expect paying off that debt to be a slow process.
MagnifyMoney's annual post-holiday survey for 2017 concludes that holiday spending was up 5 percent from the previous year. About half of the people surveyed said they expect to pay off their holiday debt, an average of $1,054, in three months or less. Roughly 30 percent said they will probably need at least five months to pay it off.
People who intend to pay off their credit cards quickly will probably need to make more than minimum payments. At a minimum monthly payment of $25, a credit card balance of $1,054 with an APR of 15.9 percent would take about six years to pay off. About $500 in interest would be accumulated in that time.
Experts advise paying off credit cards completely by using one of two methods. The so-called avalanche method puts a priority on the credit card with the highest balance. Paying that off first can greatly reduce interest accumulation. The other method, called the snowball method, involves attacking the lowest balances first to get a handle on overall debt.
When someone finds that they simply cannot afford to make even minimum payments on their bills, they could opt for debt consolidation or even a personal loan with a lower interest rate. However, the only option that offers legal protection from wage garnishment and other types of collection efforts is bankruptcy. An attorney could help a client decide if bankruptcy is the best solution.