Tips for paring down debt in the new year

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Christmas is over, and the clock is ticking ... only a few weeks until those credit card bills arrive. If that makes you sick to your stomach, consider making a resolution to pare down your debt load. These tips from First Bank landed in our inbox today, and they make a lot of sense. Here are some ideas for righting your financial ship in the new year:

-- Put all of your credit cards ‘on ice.’ Take every credit card out of your wallet until you have retired the debt in full. This may mean keeping your cards ‘cooling’ through the spring and beyond.

--Begin now to set a 2009 holiday budget. Add up your holiday expenses from 2008, and divide the total by the number of pay periods you have each year. Set up a payroll deduction for this amount, and put the funds into a special savings account.

--Don’t carry holiday debt from one year to the next. Resolve to spend only what you can afford and don’t go overboard.

--Always pay the monthly minimums. If possible, pay extra on the card that has the highest interest rate.

--Consider consolidating debt to one credit card with a low interest rate and pay as much as possible each month. Banks often offer special balance transfer rates to encourage consolidation.

--If you’re slipping behind, seek assistance from the Consumer Credit Counseling Service (CCCS). This not-for-profit service operates offices in major cities, and phone numbers can be found in local white pages.

--If you don’t feel comfortable contacting the CCCS, contact your creditors directly. Talk with them to negotiate an acceptable payment schedule.

-- Julie Makinen