It’s easy to go a little—or a LOT—crazy during the holidays when it comes to overspending. Sometimes cutting back a bit in January so you can pay down your debts is the most sensible thing to do. But what if you’re really overdone it and your bank account is seriously hurting from a major spending hangover? Then you need to take more drastic measures. Here are five things you can do now to get your finances back on track in 2018.
Sell off those gift cards! If you’re in debt up to your eyeballs, don’t use up gift cards to to buy stuff you really don’t need. Instead, sell them! It’s super easy with gift-card exchanges like Cardpool, Gift Card Granny, and Raise.com. You won’t get the full value for the card, but you can use the cash to pay down that credit-card debt. On the other hand, if there are things you really need to buy—we're talking necessities folks!—go ahead and use up the cards but do it fast. Retailer bankruptcies are at record levels and you don’t want to end up stuck with worthless plastic. Be especially cautious if the cards are issued by small local shops and restaurants. Most small businesses don’t last very long. Only 50% last 5 years, according to the Bureau of Labor Statistics! Whatever you do, don’t let gift cards sit around or you might forget about them; $1 billion in gift cards go unused every year!
Pay off store cards first! Store cards offer all kinds of juicy discounts and other rewards for signing up, but they also have sky-high interest rates that can be close to 30%. By comparison, the national average for credit cards overall is 16%. So if you signed up for store cards during the holiday shopping frenzy, avoid keeping balances on these cards or you’ll end up paying for those “rewards” many times over when you get slapped with interest payments. Be especially wary of 0% interest store-card offers (like the one pictured above from T.J. Maxx). That's because they all have a limited time period and if you don’t pay the balance before the deadline you can end up getting stuck with months of accumulated interest payments plus possible penalties.
Return gifts you don’t want—or sell them. Many stores have extended return deadlines during the holidays. Best Buy, for example, takes things back until January 14. Amazon gives you until the end of January (Amazon Marketplace 3rd party sellers may have different policies so be sure to check). But keep in mind that some stores have tightened return policy requirements. So hold on to or ask for receipts, and avoid opening the packaging or taking off tags or you might be out of luck. If you can’t take back unwanted gifts, sell them! It's easier than ever. In addition to eBay there are a slew of other options, including apps and sites like LetGo, Poshmark, Mercari, Dealo, and OfferUp. Also check out the Amazon Seller App.
Cut down your credit card interest rate. Call your credit card issuer to see if you can get your rate reduced. If you have decent credit and your account is in good standing, you might just get a few points knocked off. If you can’t get it lowered, see if you can transfer the balance to a lower-rate card. Just be careful to read the fine print so you understand balance-transfer terms, especially fees after the introductory period. Two good places to find out about credit card deals and low-interest cards: Creditcards.com and bankrate.com.
Do your taxes ASAP! If you’ve got a tax refund coming to you, do your taxes as soon as your paperwork arrives. Employers must send you your W-2s, which you’ll need to file your taxes, by the end of January. Use that money to pay off your credit card balances. The sooner you pay those balances off the less you’ll pay in interest—and the faster you can get over that holiday hangover!