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Stop beating up on yourself and trim post-holiday bills

How much did I spend this year? This may be the question that many of you are still asking as bills continue to roll in.

Before you start hyperventilating and beating yourself up for going over budget, relax and commit yourself to trimming post-holiday debt with these easy steps.

Step 1

Open your bills when they come in.

It’s tempting to let the mail pile up when all it contains is bad news.

But whatever satisfaction you might get from avoiding your bills will vanish if you miss a payment and are slapped with late fees and a hiked-up interest rate. As the post-holiday bills come rolling in, assess when the totals are due, how many credit cards you have, the percentage rates for each card, as well as the minimum amount due.

Step 2

Call your credit card company for lower interest rates.

If you have cards with interest rates higher than 12 percent, call customer service and ask to have your rate reduced by a couple of percentage points. Don’t be intimidated: You’re asking for something that is very much within your rights as cardholders. If you have a good credit history, most card companies want your business and may reward you by lowering your rate. But you have to ask.

Step 3

Focus on paying off the card with the highest rate.

The bill with the highest interest rate is your most expensive debt.

Paying it off will save you quite a bit in interest payments in the long run. Rank your credit card bills in order of interest rate, highest to lowest. For the time being, set aside the bill at the top of your list. Decide to pay the minimum balance on the rest of your cards, then put the maximum you can possibly afford against the card with the highest rate.

Use this technique until you’ve paid off the first card on your list, then apply your money on the next and next, until you’ve paid them off. You’ll be surprised at how easy it is to pay down your debt this way. But this only works if you do not add to your current debt by using your cards.

Step 4

Make some tough decisions.

Stop using credit cards right away. If money’s really tight, consider taking a part-time job until the debt is paid down. You may eventually have to tap your savings and apply some of that money toward your debts. But never deplete your savings. In fact you should have more than six months worth of salary sitting in your savings.

Step 5

Get a copy of your credit report.

You can get a free credit report each year by going to www.annualcreditreport.com. This is the only Web site authorized by law to give you this report. There are other sites, but you may end up paying or your information could be collected and sold. You don’t need to subscribe to any service to get this report. If something in your credit report doesn’t look right, contact all three credit bureaus — Experian, Equifax and TransUnion — to find out what you need to do to address it. Also check the report to make sure that no one is opening accounts in your name.

To help speed up debt reduction, consider giving up one or more luxuries, such as a manicure or pedicure, cable TV for a few months, eating out — this list could go on.

Experian reports the average consumer is nearly $12,000 in the red — not counting mortgage debt. As the New Year approaches, now is a good time to make that resolution to eliminate your debts and to make a plan for next year’s holidays so you won’t overspend and have to manage another holiday debt.

If you need assistance with eliminating holiday debts, contact our office for help and look for classes in the next coming weeks that you can attend. To visit the credit reporting agencies Web sites, type in the addresses below:

* http://www.equifax.com;

* http://www.experian.com

* http://www.transunion. com

Toi Degree, family and consumer education agent with the N.C. Cooperative Extension Service in Rowan County. Contact her at 704-216-8970 or Toi_Degree@ncsu.edu.

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