The tax refund you receive in 2017 could be just what you need to pay down any credit card debt you rang up over the festive season. It may help you to clear your balances and enjoy the rest of the year with fewer struggles.
The holiday season is a wonderful time of year for families, but many Americans spend more than they can afford, leading to a credit hangover after Christmas. Mark DiGiovanni, a Certified Financial Planner, says that due to a lack of budgeting and restraint over the festive season, many people spend themselves into a hole by the beginning of the next year, and "they spend the better part of the year trying to dig themselves out."
A recent study found that credit card debt in the U.S. varies from state to state. DiGiovanni suggests the rising number of loans are due to the improving economy, with many households becoming more optimistic about taking on extra debt. For those in states like Georgia, which ranks third in the country for average credit card debt, and where the average income is lower, this has led to more spending on plastic.
To tackle these debts, DiGiovanni suggests households try to cut their expenses during the first few months of the year and put any savings towards credit card bills. If your balance has not been cleared by April, he recommends using your tax refund to reduce the remaining debt.
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