Vision Credit Education, Inc.

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Most Debtors Plan to Delay Credit Counseling Until After Holidays

November 18th, 2012 by Kenneth Long

You know you need help with your credit card debt, yet your kids expect you to provide them with a nice Christmas. If you are like most households this year, you will overspend during the 4 weeks between Thanksgiving and Christmas, and then pay for it with high credit card bills in January.

Your holiday gift-giving may be a top priority during November and December, and you may look for creative ways to pay for it. The most desperate households depend on holiday income tax loans or payday lending in order to raise quick cash. Some wait until January to get a refund anticipation loan so they can pay down their balances.

You may already know that your credit card balances are getting out of hand. Your finance charges alone could be totaling hundreds of dollars a month, eating into your already limited budget.

Still, if you are like most debtors, you will choose to go into debt even deeper for the holidays, only to regret how much was spent once the higher bills arrive in the new year. Can you afford to take the plunge and seek help prior to the holidays?

If you created a holiday fund, then yes you probably can. A holiday fund is an old concept, but it can work wonders even today by allowing you to squirrel away a few bucks throughout the year to give you a few hundred dollars in holiday spending allowances without having to rely on your credit cards. This may sound like a good idea for next year, but it is probably too late to begin once you are getting close to the holidays.

If you are planning on going hog-wild on holiday spending, only to expect to join a debt management program in January, it could be a risky mistake. If your creditors accept you, then your payments will be higher. However, you should understand that some creditors will initially deny your acceptance into such a program if they believe you recently overspent in the weeks prior to joining. This could effectively ban you from benefits for a period of anywhere from 6 months to 1 year before you meet eligibility requirements. For truly stretched debt situations, this could mean the difference between averting bankruptcy and having to file.

A great alternative is to discuss your finances openly with your family. Let them know that this will be an important year for the family financially, and that you need their help to cut the budget so that you can ensure that more painful cuts are not needed later. Your family will understand, and they can help you find other ways to save money so that you can get back on track in the new year. You can still have a great holiday season without breaking out the plastic. To find out more, contact a credit counseling organization today to see what options you have both now and in January.

This entry was posted on Sunday, November 18th, 2012 at 2:21 pm and is filed under Budgeting, Credit Cards, Debt Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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