Did you overspend at Christmas? Here are 4 tips to handle holiday debt

Picking up perfect gifts for friends and family and then feeding and entertaining them through the holiday season can often mean facing tough credit card debt after the bellshave all been rung.

Veteran credit counsellor Al Antlesays he sees this problem all too often at this time of year.

"The reality is that people are depending on credit now more than ever before, and we went crazy in December," said Antle, the executive director of Credit Counselling Services of Newfoundland and Labrador.

If the Christmasaftermath is giving you headaches and bills that seem insurmountable, Antle has three tips and suggestions for improving that stressful financial situation.

1. Know you are not alone

Antle said that debt is a reality many people face in during this time of year. Often, the size of that debt can astonish the people who rack up the bills.

"We see people all the time who just have no idea how much they spent on Christmas," he said.

According to Antle, Canadianscollectively owe in excess of $1.70 for every dollar they earn.

In December alone, his company opened 38 new cases. It's a myth, he said, that poor people need credit counselling the most.

"Thirty-twoof them were incomes in excess of $50,000 a year," he said.

"It speaks volumes to the fact that Canadians, and Newfoundlanders by extension, are the most indebted people on the planet."

2. Don't panic

Antle said he recommends taking a deep breath and properly assessing your options once bills start rolling in.

"One of our concerns would be that they will run off and declare bankruptcy because they feel that there's no way around the problem," he said.

"I think the first thing you need to do is to stop. You need to take a day or so and just kind of chill out."

While it may seem appealing to consolidate your credit or seek help at your bank, Antle said that the bank may not have your best interests in mind. He said that while consolidation loans are "great ideas," they're "not for everybody."

"When you're going to your bank and saying, 'consolidate all my debt,' the bank's going to say yes. Because the banks just got wealthy off of your decision," he said.

"What we're suggesting is that you reach out to get some unbiased help, like credit counselling or some other source of financial information that can help you make a decision."

3. Crack open the piggy bank

Got a piggy bank? Get a proverbial hammer.

Antle said that if you have savings, liquidating them may be your best option.

"Abandon savings in the short term. A lot of people get really uptight because their savings [are]limited, or in fact nonexistent. That's a valid concern," he said.

"But you know, if you have access to an asset that will give you cash, like a savings account, liquidate that savings account."

4. Tackle the right debts

Antle said that paying off the correct debt is crucial, too. While large debts may seem like the right thing to start paying into, smaller debts can accrue interest that can be more harmful to your finances.

"Credit cards specifically, you know, department store type credit cards, are the most expensive form of debt you can have. The interest rates on these things are mid 20's. 22, 24, 26, percent," he said.

"So you want to get rid of your most expensive debt first. And that, to some people, may not be the biggest debt you have. So people look to me all the time and say, 'What do you mean? Hang on a sec. You're you're telling me that I need to get rid of my $2,200 ABC department store account while I have $10,000on a line of credit?"

He said that the smaller department store account wouldcost the consumer more in accrued interest.

"That's what's dragging you down, what's likely to keep you playing catch-up for the longest period of time."

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