7 On Your Side: Cures for holiday spending hangover

NEW YORK (WABC) -- Holiday spending was up this year, with the average shopper spending $1,325 during the season.

If you used credit cards and only pay the minimum, on average, it will take seven years and five months to pay off -- and will cost you an additional $881.50 in interest.

That's enough to give anyone a holiday hangover.

But instead of taking an aspirin, follow these few steps:

First, write out a budget and keep it simple. Start with listing your fixed costs like rent, car payments, and your take home pay.

Then, look at your year-end credit card statement. See where you are overspending. Is it restaurants? Is it shopping? This will reveal the source of your spending problem.

To get it under control, switch to an all cash diet. Try it for one month. Only spend what's in your wallet, and take a breather from the plastic.

Financial lawyer Leslie Tayne says if you have good credit and qualify for a 0% interest credit card, you can transfer balances from other credit cards and save a lot on interest.

Just watch out for upfront fees and take note of when the expiration on the 0% interest rate. You can also explore debt consolidation if you fear you can't rein it in.

The average credit card rate runs anywhere from 9 to 13%, all the way up to 24%. Depending on the type of card you have and your credit rating, a debt consolidation loan could be in the single digits.

Also look into loan consolidation and see if it's right for you.

The average consumer has three credit cards and carries a balance of about $6,000, with a paying interest around 22%.

At that rate, you'll shell out over $1,300 in interest over the course of the year.

If you consolidate those cards into one loan consolidation payment of say, 11%, you'll cut what you pay in interest by almost half.

And the last tip, check out re-financing both your home loan and student loans. Mortgage rates are currently at a three-year low and student loans are cheap right now too, starting at about 1.9%.

A few big takeaways:

Be careful of unsolicited offers. Your exact debt info is for sale to marketers from credit bureaus, so don't be fooled if you get a letter offering a loan for exactly what you owe on your credit cards.

Read the fine print, and research the company.

Lastly, file your tax returns and use your refund to pay off debt in a lump sum. That extra payment makes a big difference.

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