Remedy for the holiday spending hangover
_BY SUZE _ORMAN Special To Florida Weekly

It's January and suddenly all the crazy spending you did in December hits home when the credit card statements start showing up, and you find yourself sweating bullets in the dead of winter over the size of your balance. Talk about a painful hangover. I've got just the remedy for your current card hurt right here.

1. Stop avoiding the problem -- avoidance is not a debt-management strategy.

I am amazed how many people deal with their credit card debt by refusing to open the billing statement envelope or e-mail when it arrives. If you try this with your finances, you are going to end up literally paying double for it: Every bill you don't pay on time comes back to hurt you twice. First, you are going to be hit with late fees and interest charges. As if that's not bad enough, you are also screwing up your FICO score. So by not paying today's credit card bill, you are going to increase the cost of every loan or new credit card you take out down the line.

2. Make like a Swiss watch.

OK, once the statement is open, don't panic. I want you to concentrate on the minimum amount due for the month. You are to make that payment right now. Pay at least the minimum amount due on time, every time. That small feat is going to make the FICO poohbahs pretty happy; your ability to pay on time accounts for 35 percent of your FICO score.

Of course the smartest move is to pay more than the minimum amount due. Just make a deal with yourself: You will pay the minimum amount each month, plus a reasonable additional amount. You will be amazed what a huge impact it is going to have on your finances.

3. Show no favoritism.

If you have several credit cards, be sure you make those timely payments on each one. Every card keeps tabs on how you handle every other card. Their prime objective, remember, is to jack your interest rate as high as possible, because that's how they make money. So if you have a low-rate card at, say, 6 percent, the card company is working overtime looking for excuses to raise it to 15 percent or 20 percent. One of the ways it accomplishes this is by having a clause in your contract allowing it to raise your rate if you are late on any credit card payment, not just that one. Even if you have a perfect track record with the company, it will snoop around your credit reports to see if you've been naughty or nice with your other payments. If you were late on one of your other cards, you've broken one of the rules, and you can kiss your great rate goodbye.

4. Consider a balance transfer.

If you can't get your holiday spending paid off in one month, and you currently pay more than 10 percent interest on your credit card, look into doing a balance transfer. Often, balance transfer offers come with an impressively low interest rate for an introductory period. If you think you can get the balance paid off in the time allotted for the intro period, then offers where your interest rate is something like zero to 5 percent for the first six months can be a great deal. But you always need to make sure you understand what the rate will be after the intro period is over, along with calculating the odds that you could still be making payments then.

You also need to realize that on a balance transfer the intro rate does not apply to any new charges you make on that card. It's all about digging into the fine print or calling customer service to find out what the rate on new charges will be.

5. Free up cash to pay off high-rate card debt.

If you don't qualify for a low balance transfer rate, your goal has to be to get the entire balance paid off ASAP. If you have money in a savings account earning 2 percent, and you are paying 18 percent interest on your credit card balance, you need to cash out the savings to pay off the debt. I know your savings are your safety blanket, but when you are sitting on a $5,000 credit card balance at 18 percent, you aren't safe.

If you don't have any savings, then it's time to look at your 401(k). If you contribute to your company plan and your boss kicks in a free matching contribution, make sure you contribute enough to get the maximum company match. But once you've hit that limit, ask to suspend your contributions. That will increase your paycheck, and every bit of that extra income ought to go toward paying off your credit card bill.

6. Deal yourself a better card hand.

Why don't you make holiday season 2008 less financially stressful? How about opening a holiday savings account in January? Have $50 or $100 automatically transferred each month from your checking account into this savings account. Then, when December rolls around, that account constitutes your holiday spending budget. Not a penny more! Shopping temperance is a challenge, no doubt, but follow my plan and you won't have to face another new year with that same old painful hangover.

- Suze Orman is a best-selling author and

Emmy award-winning TV host whose new

book, "Women and Money," was published

in March 2007. For details, please visit www.

suzeorman.com.