Getting rid of holiday debt

By now you will have received your credit card bill for what you spent at Christmas and over the holiday period. If there was a big figure at the end, you’re not alone. Kiwis charged a massive $2.273 billion to their credit cards in December 2006.

If you can’t afford to pay off the total balance this month, pay as much as you can by the due date. Make sure you pay more than the minimum repayment to save on interest costs.

The longer you leave an unpaid credit card balance the more expensive it gets. So set up a plan to pay off your card as quickly as possible. Try the Credit Card calculator on www.sorted.org.nz.  

Simply enter the total of what you owe, the current interest rate, and how much you can afford to pay each month. The calculator will show you how long it will take to pay off your credit card debt, and the total amount of interest you will pay. You can also see what happens if you change your repayments.  

Take a close look at your budget. If there’s anything left over at the end of the month, you’re probably better off using it to pay off high interest credit card debt than putting it into a savings account. The budget calculator on www.sorted.org.nz can help.

Sorted is the Retirement Commission’s free and independent personal finance website. It’s packed with information, tools and calculators to help you manage your money.  

If you're really struggling with your money or you just want some help getting started on budgeting, contact the NZ Federation of Family Budgeting Services. Their services are also free, and you’ll find your local adviser in the Telecom White Pages under Budget Advice Services.