Christmas is one time of year we can pretty much guarantee will leave our pockets feeling lighter. After all, covering the cost of decorations, socialising, food & drink and gifts for family and friends doesn’t come particularly cheap – and many of us will turn to credit cards and other forms of borrowing to give our budgets a boost.

However, credit card debt could become a costly expense if you don’t take steps to repay your balance sooner rather than later. Let’s look at how you could get on top of your debts after Christmas and keep your finances in shape.

 Are you struggling with your debts?

Of course, your ‘Christmas debts’ aren’t necessarily the only debts you’ll be carrying – you might already owe money to multiple lenders. If you can no longer afford your agreed credit card repayments, agreeing a new affordable repayment plan should be a serious priority. For example, you could begin to make lower repayments at a realistic pace with a debt management plan – an informal agreement that your lenders may decide is the best way of getting back the money you owe them.

If you decide a debt management plan is the best approach to your debts, you could ask your unsecured lenders to accept monthly payments you can afford, ensuring that they fit around all your other essential costs (utilities, food, rent/mortgage, etc.). However, making smaller repayments over a longer period could end up being more costly overall (due to interest), unless your lenders agree to freeze interest on your unsecured debts.

You’d make your monthly repayments until you’ve repaid the total amount you owe, or until a change in your circumstances means you can start making your original repayments again.

Although making reduced payments will show up on your credit history for six years – which could make borrowing more money difficult in that time – it’s likely your credit rating will already have been affected if you’re in this kind of situation, since debt management is only suitable for people who can’t make their agreed repayments.

 Are you managing your debts well?

If you’re repaying your credit card debt relatively easily, you may want to consider making more than the minimum repayments. Getting out of debt faster like this could also save you quite a bit of money in interest payments, so it may be worth the extra money per month.

If you can’t afford to make more than your minimum payments, you might consider ways of boosting your budget to ‘overpay’ your debts, e.g. sell some old DVDs, cancel that gym membership you don’t use, or use discount vouchers when food shopping. Working your way towards becoming debt-free could be a New Year’s resolution that’s well worth sticking to!