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Managing holiday credit card debt: Tips for Washington consumers

Despite evidence that consumers in Washington and across the country have been more conservative with their credit card usage since the recession, it is tempting for even the most careful person to charge more during the holidays. In fact, one credit management organization reported recently that January is a busy time, due to people who are trying to get a handle on credit card debt. While there are smart ways to pay down this debt, consumers can also plan throughout the year in order to avoid it in the first place.

It may be helpful for consumers to record their spending habits so they can see where they might cut back. Buying fewer coffee drinks each week, for example, frees up more cash to pay toward debt. Consumers can also calculate how much they spend on holiday gifts so they can start saving a little out of every paycheck toward gifts for the following year. Doing this may eliminate the need to use credit cards next holiday season.

Some financial professionals argue that paying down credit cards with the highest interest rates should be the priority. Others believe that consumers should pay off accounts with the lowest balance first. Regardless of which method a consumer chooses, he or she should not spend that monthly payment once the card is paid off. Instead, it should be applied toward another credit card balance.

Even the most careful consumer may struggle to pay down credit card debt if he or she faces an unexpected financial emergency. Washington residents with this problem may benefit from seeking advice about their debt relief options. Bankruptcy often offers the best chance to get a handle on debt, either by discharging it or setting consumers up on a payment plan with reasonable terms. While it is a last resort for some, others see it as a chance to regain some peace of mind and make a fresh start.

Source: Rockford Register Star, Here's how to get out from under your Black Friday debt, Alex Gary, Dec. 14, 2013

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