Christmas holiday spending can cause credit card bills in January to rise substantially. A household that struggles to get by from one month to the next will find that next year will be much tougher.
If you find that you are going to have trouble meeting your January credit card bills, you should consult with a credit counselor for help. Taking action before the possibility of missing a payment can prevent disaster and preserve your credit score.
Minimum payments typically rise in January. This is due partly to the extra $400-1,000 in balances added for the holiday season.
What hits many households by surprise is that their minimum payments and interest rates and rise substantially in January. This is mostly due to allowing one or more credit cards to approach the credit limits on those accounts.
According to Daniel Johnson of Vision Credit Education, just allowing one credit card balance to approach the credit limit can trigger other credit card companies to raise your rates and your minimum payments. They routinely check your credit report to look for signs of financial weakness.
You can prove this by requesting a free copy of your credit report using the free annual credit report service mandated by Congress. You can spot the Account Review inquiries by your existing creditors. These are their credit checks to see how you are managing your other credit accounts.
Although universal default policies are weakening due to Congressional pressures, creditors do still have powerful ways to charge you fees and raise your interest rates. If you find that you are facing increased payments that will be hard to manage, contact a credit counselor today, before it is too late.
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