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Between Santa shenanigans, special foods, long-distance travel and treats, holiday spending adds up quickly—and so does holiday debt.

In 2019, shoppers in the US spent 3.4% more than they did in 2018. Unsurprisingly, they also ended up owing 8% more—roughly $1,325 per adult in 2019 versus just over $1,000 per adult in 2018. Unfortunately, holiday credit card debt lingers far longer than leftover turkey. About 25% of parents surveyed by YouGov in November 2019 were still paying off expenses from the previous holiday season. 

If you don’t—or can’t—repay holiday debt promptly, it’ll accumulate over time. In this article, we’ll talk about some of the best ways to pay credit off quickly. 

How to Pay Off Holiday Debt

There are lots of ways to pay off holiday debt. Some people make single lump-sum payments to minimize interest, while others go for interest-free repayment plans or consolidate their credit cards. Here are seven solid ways to reduce seasonal debt.

1. Pay Debt Off Early

If you pay holiday debt off early, you’ll pay less in interest and save money overall. Pay off as much of your credit card balance as you can every month—and carry on until you’re home free. Interest charges accrue daily, so make those payments early in each statement cycle. 

Remember that average $1,325 debt balance from the 2019 holiday season? Let’s imagine it’s all on a single credit card with a 21% APR:

  • If you pay $50 a month, it’ll take you three years to pay off your full balance, including $471 in interest.
  • If you pay $100 a month, it’ll take you 1 year and 4 months to pay off your full balance, including $196 in interest.
  • If you pay $200 a month, it’ll take you just 8 months to pay off your full balance, including $96 in interest.

Check out Credit.com’s credit card payoff calculator to figure out your own holiday debt repayment schedule.

2. Apply for a Balance Transfer Card

Balance transfer cards make everything simpler. If you have a good enough credit score, move your debt to a low or zero-interest balance transfer credit card to minimize interest charges. Here’s why:

  • You can use a 0% introductory APR to pay your holiday debt off over time without incurring any interest charges.
  • Some cards offer a 0% option for 12 or 24 months, giving you up to two years to pay down holiday debt.

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3. Give Up One Expensive Thing

Expensive habits can make it hard to pay off debt. If you want to make a bigger dent in your balance, think about giving up a couple of luxuries each month. Consider making the following changes—just for a little while:

  • Cut your cable bill and trim other entertainment expenses
  • Cook meals at home instead of eating out
  • Consolidate errands so that you drive less and spend less on gas
  • Forgo a few luxuries at the grocery store 
  • Go out for drinks fewer times a month

Should I go on vacation or pay off debt?

Everyone loves a restful vacation. If you’re struggling with high-interest debt, however, you might be better off staying at home until you get your payments under control. Concentrate on paying off debt now, and you can reward yourself with a truly relaxing vacation later.

4. Spark an Avalanche or Snowball Your Debt

Personal finance experts swear by two distinct methods when it comes to debt repayment—the snowball and the avalanche. Here’s how they work:

The Snowball Method

The snowball method builds motivation and helps build up to the toughest balance. In a nutshell, you pay off your smallest debts first to give yourself a boost, and then move onto larger and larger debts. 

The Avalanche Method

With the avalanche method, you make minimum payments on all debts and use any leftover money to pay down high-interest debt. Over time, this method will save you a lot of money in interest charges. 

>> Try these debt management apps

5. Go for Debt Consolidation

If you want to lose the plastic altogether, think about applying for a debt consolidation loan. Go for a loan with a low interest. Then, avoid putting any more money on credit cards until you’ve paid off most of the consolidation loan

How Can I Get Out of Debt with No Money?

If you’re in a financial rough patch, don’t panic. First, call all your lenders and tell them what’s going on. Many financial institutions offer deferments, temporarily lower payments, low-cost structured repayment plans and other reassuring options—but only if you ask. 

Meanwhile, nix unnecessary monthly expenses, create—and stick to—a strict budget, and don’t create any more debt. You could also:

  • Put together a realistic debt-repayment plan
  • Increase your income with a better-paying job, or ask your boss for a raise
  • Ask your lenders for a lower interest rate
  • Consider consumer credit counseling
  • Concentrate on one debt at a time to avoid feeling overwhelmed

>> Download our free budget template to get started.

6. Use Financial Planning Apps

Financial planning apps make life much easier, whether you’re saving or repaying holiday debt. Tally, for instance, can help you get a handle on your outgoings, save money on interest payments and create a solid debt-reduction plan.

Mobile banking option Chime includes a plethora of tools designed to make your financial life much easier. Chime Savings Account has two automatic savings options: One feature rounds up transactions and saves the change every time you spend, and the other lets you easily save a percentage of your paycheck every time you get paid.

>> Read our full Tally review

>> Read our full Chime review

How much debt does the average person owe? 

According to credit bureau Experian’s 2019 Consumer Credit Review, we are accumulating debt at an average of 3% per year. The average debt load is broken into the following categories:

  • $6,194 on credit cards
  • $1,155 on store cards
  • $16,259 on personal loans
  • $19,231 on auto loan debt  

Not all consumers have mortgages or student loans, of course, but those who do have an average $203,296 mortgage balance and a $35,620 student loan balance.

7. Check Your Credit Score

Winners keep score—and they stay on top of their credit scores, too. Regularly checking your credit report will help you understand your finances and can give you a benchmark for improvement. You’ll also be able to respond to discrepancies and add missing information. Don’t know your credit score? Check out your Credit Report Card at Credit.com for free or sign up for ExtraCredit to crunch the numbers.

Tackle Holiday Debt Now

Try to save ahead to reduce the amount of debt you accrue each holiday season. If you opt for a credit card, choose a low-interest option with rewards—and try to pay off your balance quickly. To avoid interest charges in the medium term, transfer your balance to a low APR card or go for a debt consolidation loan. Above all, create a realistic budget and stick to it to avoid unnecessary holiday debt. After all, the best gifts—expensive or not—come from the heart. 

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