If you planned to put your tax refund toward debt or expenses, it can be stressful to receive a reduction or bill instead. Thankfully, there are a few different ways to get the cash you need without having to depend on a tax check.
3 Ways Of Paying Your Spring Break Vacation Credit Card Debt
If you used a credit card to alleviate spring break expenses, don’t panic. Here are a few ways that you can tackle your credit card debt, without spoiling your vacation.
1. Debt Consolidation
If you spread the cost of your trip across multiple credit cards, or if you had existing debt before adding your vacation balance, consolidation might be a helpful option for you.
If you have good enough credit, opening a balance transfer credit card is an easy way to consolidate your debt. For most cards, you should have a score of at least 690.
If you find a card that offers a 0% introductory APR, you won’t have to pay interest on the new balance during the promotional period. With this option, you will save money on interest while also simplifying your monthly payments in the process.
Most cards have an initial interest-free grace period of 12 to 18-months.
2. Obtaining Additional Credit
If you don’t have a great credit score, you can still access other lines of credit to handle your vacation debt. If your new loan has an interest rate that is lower than your credit card(s), this is an easy way to simplify your repayment process while saving money in the long run.
Auto Title Loan
If you own a vehicle with significant resale value, you can qualify for an auto title loan.
Depending on your credit score, you can expect to pay more or less in interest. But, if your car is in good condition and you’re able to stay on top of your payments, an auto title loan could be your way out of the credit card debt cycle.
Home Equity Line of Credit
Homeowners can use home equity to quickly and easily pay off their vacation debt. A Home Equity Line of Credit (HELOC) is essentially a variation of a standard mortgage, which uses your home’s equity as collateral for the loan.
These loans typically provide lower interest rates, and that interest is tax deductible. This option is great for anyone who wants to create their own stress-free repayment plan, while focusing on one primary credit bill instead of multiple card payments.
If you expect to earn more money shortly after you’re back from vacation, a payday loan might help you pay your debt faster. These loans are helpful for borrowers with bad credit, since you usually only need to show proof of income to qualify. However, payday loans typically come with higher interest rates.
For responsible borrowers who plan on paying the full balance of their loan in a short amount of time, this can be an effective short-term option to handle credit card debt.
3. Negotiate With Your Creditor
If you’re concerned about your ability to reduce your credit card debt with alternative payment methods, your creditor might be able to help.
This option allows you to come to an agreement with your credit card servicer in order to find a repayment plan that works for you. There are a few primary ways to adjust your repayment plan:
If you find yourself with a considerable amount of money to put toward your debt, agreeing on a settlement can greatly reduce your total balance.
You might be able to agree on paying only your principal balance, while forgoing the interest you owe, using this method. Once you come to an agreement with your creditor regarding the amount you will actually owe, make sure to get a written copy of your repayment plan before sending your settlement.