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Many Australians get caught up in the holiday spirit a little too much and splurge using their credit card and once the bills for those purchases start arriving, you might be starting to feel the pain of a credit hangover.

So how can you stop a credit hangover from affecting your finances?

Don’t borrow money to pay debt
Borrowing more money will just continue the debt cycle. Although personal loans interest rates are not as high as most credit cards, it will still be almost double what you are paying on a home loan. So although you may think that borrowing money may provide short term financial relief, you will be paying interest on a loan that will continue to eat away at your finances.

Create a mini budget
Creating a specific budget just for this holiday debt will help you pay it off sooner. It is important that you aim to pay off your credit cards over a few months to avoid paying excessive interest. So, create a strict budget with all available money going towards the credit card repayments.

Reduce extra mortgage repayments
If you have been making extra repayments on your home loan, you may find that by reducing back down to the minimum repayments for one or two months can help pay off your credit card debt quickly and relieve some financial pressure.

Also, if you have an offset account where you have been saving extra money, you may be able to withdraw a lump sum to help pay off a chunk of debt. But don’t forget to adjust your budget so that you can quickly repay the money you took out and continue saving interest on your home loan.

Ask for help
If you know that you are not going to be able to pay a bill on time, make sure you call the company who issued the bill. By contacting them before the due date, you may be able to negotiate an extension. However, if you wait until after the deadline, there is a good chance they won’t be able to help you.

Switch to a debit card
To avoid being in the same situation next year, once you have paid off your credit card, consider switching to a debit card. This way, you can only use money you actually have and it will help stop unnecessary impulse buys.

A credit hangover can take a while to recover from, so the best way to avoid getting in this situation again is to take pre-emptive steps before Christmas to start the New Year off on the right foot.