The January Credit Card Statement: Navigating Post Holiday Spending

The holiday season has come to an end. As a UCC minister or caregiver, you spent this joyful time celebrating with your friends, loved ones, and church community, sharing the warm blessings of exchanging gifts. But then, the mail arrives, bringing with it that dreaded credit card statement, and the stark reminder of all your holiday spending.

According to a 2021 study done by LendingTree, 36% of consumers took on an average of $1,249 in holiday debt. 62% of these consumers put the debt on their credit cards. A 2023 study conducted by Grey Matter Research indicated that for clergy members specifically, 65% have debt in non-mortgage categories, 41% of that being credit card debt.

If your January credit card statement feels overwhelming, you’re not alone. The good news is that with some strategy, you can regain control of your finances and start the year off right. Read these five tips to manage your credit card debt after the holidays and set yourself up for financial success in the coming year.

1.      Pay more than your minimum monthly statement. 

It might be tempting to pay only your minimum monthly payment since it feels like less money, but every dollar you pay above the minimum goes directly toward reducing your actual debt. When you only pay the minimum, interest on the remaining balance continues to add up. Paying more than the minimum allows you to pay off your debt faster and reduce the amount you pay in interest. So, pay extra, and eliminate your debt sooner.

2.      Pay off debt before taking on new expenses. 

Before charging more purchases to your credit card, prioritize paying down your existing balance. Adding new expenses while dealing with debt will lead to even higher balances and more interest, making it harder to regain control over your finances.  

3.      Track your spending.

To avoid overspending or adding new charges to any existing credit card debt, keep a list of all your planned expenses and stick to it. Figure out how much you can add to your card without worsening your debt. Staying organized and mindful of your expenses will help you manage post-holiday financial stress.

4.      Create a realistic repayment plan. 

Establishing an organized and achievable repayment plan is key to tackling credit card debt. Look at your monthly income, expenses, and credit report to understand how much you can realistically set toward paying off your credit cards. According to a 2023 Forbes report, 46% of U.S. cardholders didn’t know about the interest rate on their card. Take time to understand your credit card and break your debt into smaller, manageable goals, and set a timeline to reach them. Try creating a list or a spreadsheet to organize your budget and visualize your timeline.

5.      Consolidate your debt.

Consider consolidating your accounts with a debt consolidation loan to pay less interest and manage your debt quicker. This loan allows you to borrow a set amount of money aimed at paying off one or more credit card balances. With a lower interest rate and an easier payment schedule, consolidation can help you pay off your debt faster. Just be sure to avoid accumulating more debt while you focus on paying down your consolidated balance.  

The start of a new year is the perfect opportunity to take control of your finances and tackle any credit card debt accumulated during the holidays. By following these five tips, you can regain financial stability and set yourself up for a successful, stress-free year.