Time is not on your side when it comes to credit debt

The decorations have been put away and mailboxes are filling with credit card bills instead of holiday cards.

If you binged on gifts and entertainment in December and your card balances are higher than you were expecting, it's important to make a plan to pay down the debt as quickly as possible, credit experts say.

"Don't put those bills aside, thinking they'll look better if you come back to them later," said Bruce McClary, spokesman for the National Foundation for Credit Counseling. When it comes to paying down high-interest card debt, he said, "time is not your friend."

If you have sound credit, but simply got a bit carried away with year-end spending, you may want to consider transferring your balances to a low-interest credit card. Zero percent balance transfer offers allow you to affordably pay the debt over time, and some cards are offering people with healthy credit scores terms as long as 12 to 21 months, said Nick Clements, co-founder of MagnifyMoney.

The catch, he said, is consumers must be disciplined and make the payments on time or they risk losing the promotional offer. That means they will be back to paying double-digit interest rates. Also, he said, try to find a card that doesn't charge a transfer fee, which often is 3 to 4 percent of the balance being transferred.

If you have a large balance, you may not be able to transfer the full amount, depending on the new card's credit limit. But, he noted, you can save money by transferring even part of the debt to a zero percent card.

Another option that is becoming more common, Clements said, is a personal loan, often made by online lenders or, increasingly, traditional banks. The loans are unsecured, just like the debt from a credit card, but they have a fixed repayment term — typically, three to five years. Some lenders will make loans for larger amounts, and interest rates can be as low as 5 or 6 percent for borrowers with good credit.

Also, rates will be higher for those with less-than-stellar credit. So you will need to compare the rate on your card with the loan rate to see if you will save money. Often, he said, borrowers can check their potential rate without having the inquiry affect their credit report.

To help keep card balances from getting out of hand in the first place, Julie Pukas, head of U.S. bank card and merchant services at TD Bank, suggests that cardholders make use of text or e-mail alerts to notify them when their spending is approaching their credit limit, when their balance reaches a certain limit or when a payment is due.

Pukas also suggested that cardholders using rewards programs check to see if they can receive their points or cash-back rewards as a credit on their card statement to help pay down their balance.

Bill Hardekopf, chief executive of LowCards.com, recommended that consumers try making periodic micropayments over the course of a month, rather than waiting until the account due date to make a lump-sum payment. If you have extra cash, you can make a payment at any time and reduce the interest you will pay if you carry a balance, he said.