Dana, a 30-year old public relations specialist, may be earning big bucks while climbing the corporate ladder but like most unattached career women in town, she is struggling with the payment of her credit card balances. For Dana, Christmas is a challenging season as she would have to rein her spending impulses to remedy her already worsening credit rating.



Like Dana, most Americans (single or married) are faced with budgeting problems. Bad credit can get worse with overspending especially during the Christmas season. Holiday debts can pile up and contribute to a negative credit rating.

A negative credit rating is just a symptom of a budgeting problem that can get worse if it goes unchecked. If you still have left-over holiday debts from last year or if you have already placed yourself in deep Christmas debt this year then talk to a debt counselor or consider the following sure-fire tips for paying off your holiday debts quickly.

1. Use CASH whenever possible. Have you noticed how you become more conscious of spending when you need to pay in cash? Paying in cash allows you to keep track of your purchases in real time and by doing so (whenever possible) you would be able to keep yourself from splurging. Ergo: less credit card balances to pay at the end of the month or whenever your card is due.

2. Use your credit card wisely. That strip of hard plastic should be used only when necessary. The first rule of thumb is to use CASH whenever possible. However, American society is so dependent on plastic that you may have to use your credit card more often. Just make sure you do so for reasonable and necessary purchases. Christmas is not a license to overspend. You may be able to buy all the things you want for Christmas (up to your credit card's limit, that is!) but your credit history will suffer if you are not able to pay all your debts on time.

3. List all your outstanding debts. You may be spending too much because you do not keep track of your debts. Document your debts (both credit card and otherwise) and print them out for a quick reference. Seeing your actual debt in black and white will help you cut back on unnecessary expenses and Christmas spending until you have cleared your credit card balances.

4. Make holiday debt payment a priority. It is fun to spend but if you have over-expended your wallet then you have no choice but to prioritize the payment of your debts first before you incur new ones. If your Christmas debts are divided among several credit cards, choose the ones with the least amount and pay it first. Then choose the other credit card balances that you can afford to pay given your financial state.

5. Sacrifice your little pleasures. Paying off your credit card balances can be a pain especially when your finances are limited. This can mean little sacrifices like cooking home meals instead of eating out and drinking instant or office-made brewed coffee instead of going to expensive coffee shops during break time or after work. Before you know it, you already have enough savings to pay for some of your holiday debts.

6. Look for additional sources of income. If your income is limited then you may have to look for additional sources of income to pay off your holiday debts. You can monetize your hobby and make good money out of it. If you are good in photography, why not take photos of your fellow workers during the Christmas party and sell them their photos? Or if you bake a mean chocolate cake, why not sell them this Holiday season? Who knows, your sideline can become a business someday which will help you improve your finances.

If despite these tips you still find yourself overspending and incurring Christmas debts like there is no tomorrow then you should get professional help. Debt counseling groups and Certified Credit Consultants can help you get your spending habits as well as your credit back on track.