Recovering From A Spending Spree

We all go on an occasional spending spree, and getting ourselves into a financial bind because of it happens to the best of us.

The holidays, home improvements, birthday presents, a new home or a new car are all reasons we overspend, and while some are more productive spending than others there are plenty of things we spend our money on that we really do not need. If you have gone on a bit of a spending spree, you need to take a few steps to bring that debt down as soon as possible so it does not have further ramifications in the future.


The first thing you need to do after a spending spree is not to let the bills pile up and to take immediate action. Sort out your debts right away so that they do not build up on you. The longer you wait the worse the debt will get, because you will incur higher minimum payments and more interest. Pay off your credit card bills as soon as they arrive, even if the payment isn't due right away. You will be less likely to forget the bill and you will not have to worry about added interest building up on the card.

If you cannot pay off the bill right away, make sure you make at least the minimum payments on the cards until you can pay off the balance. If you have extra funds, apply it to the credit card balance. Do not pay them late. Late fees will be added to your balance and they are a shocker when you get the bill and see them sitting there. Late payments are reported to the credit agencies and go on your credit report . This allows future lenders to see that you have been late and they may refuse you credit. Additionally, your other credit card lenders may decide to raise your interest because of these late payments and this can cause you more problems when you are trying to pay off those cards.

Consider transferring your high interest rate balances to a lower interest rate card. This will make it easier to pay off the balances. Shop around for lower interest rate cards but make sure that there is no time limit on the interest rates. If you cannot pay off the balance on the card within that lower interest rate time frame, you are looking at paying a higher interest rate on the entire balance from the day you transferred the money.

Finally, apply any extra cash you may have towards your high interest loans and credit cards. It is better to get these balances paid down because the interest will continue to accrue. For example, if you have money in a savings account that is only collecting virtually no interest and you are paying on a credit card with 18% interest, the money in your saving account will get a better return on it if you use it to pay off the card. The sooner you pay off your spending spree debt, the better off your finances will be.

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