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How to Get Out of Holiday Debt Quickly

The holiday season may be the most wonderful time of year, but it can also be the most expensive. If you’ve spent more than your wallet can handle, get tips on how to get out of debt quickly after the holidays!

You could call it the post-holiday blues — that letdown period after the holidays. The excitement is gone, decorations get boxed and presents are put away. For many households, trading in fun festive spirit for some post-holiday (over) spending stress only worsens the funk.

Throughout December in 2019, Americans ended up in $1,325 holiday debt on average, according to a post-holiday debt survey by MagnifyMoney.1 In fact, the study found that 2019 holiday debt increased by 8%, and 58% reported feeling stressed over their holiday debt.1

‘Tis the season for holiday cheer and … financial stress. If you’ve spent more than you can afford, check out these tips on how to get out of debt quickly, so you can avoid interest and pay off those balances sooner than later.

Tally Up Your Holiday Debt

First, calculate the total of your seasonal debt and make it a priority to bring that down to zero. Prioritizing repayment may require you to pause on saving for a financial goal and make some temporary sacrifices. Start by reworking your budget. To make aggressive payments, plan to borrow money from more flexible, discretionary categories and allocate those funds to your holiday debt payoff category.

Choose Your Approach

While you’re reworking your budget, plan how you’re going to pay off those balances. The two most popular methods for making payments on various credit cards include the snowball and avalanche methods.

  • The snowball method targets the smallest debts first, such as the credit card with the smallest balance. This way, you work toward having fewer payments to manage. The benefit of this method is enjoying the rewards of knocking out one card at a time, which can keep you motivated to stay the course.
  • The avalanche method targets debts with the highest interest rates to help you save on overall interest. Aim to pay more than the minimum balance on high-interest accounts while also paying the minimum balance on other credit cards. You may lose the gratification of eliminating one debt after another, but you’re also reducing long-term costs.

Consider Credit Card Debt Consolidation

Credit card debt consolidation may be a good strategy for those indebted shoppers and spenders whose holiday bills piled onto existing debt prior to the holiday season. Debt consolidation rolls all of your balances into one by means of a balance transfer credit card or personal loan, for example:

  • A balance transfer credit card often offers a 0% (or low) introductory interest period. Ideally, you’ll repay the transferred debt off in full during the promotional period before interest kicks in, while halting any spending on your card. Although there may be a fee for this type of consolidation, this is a good option for those who have high-interest rates and can afford to expedite their repayments.
  • A personal loan is another consolidation option to help borrowers pay off debt by offering a potentially lower interest rate, which can help you save. Don’t be surprised, however, if you’re charged an origination fee for this type of loan. You’ll want to calculate if paying the fee is worth the potential future savings.

Avoid Those Post-Holiday Markdowns

For many retailers, December 26th marks the beginning of huge discounts. DealNews lists holiday décor, clothing, video games and electronics to be the top categories for post-holiday sales. DealNews also predicted that prices could be marked down by up to 75% at different stores, including big retailers like Amazon and eBay.2 These deals are tempting, but if you’re in holiday debt, avoid that unnecessary shopping and ignore those specials.

Put Extra Funds Toward Debt

Any extra money left over from your monthly budget should go straight toward debt. Haven’t spent your holiday bonus yet? Expecting a tax return this year? Yep, you guessed it. If you answered yes, then you’ll want to allot that money toward your credit card balances, which supports your financial bottom line: pay off holiday debt.

Go on a Spending Freeze

Now that you’re taking a break from in-store and online shopping to avoid tempting discounts, you may want to go cold turkey on non-essential spending. This can include takeout and restaurants, pricey beverages, unnecessary household items, cosmetics, excess groceries, little pick-me-ups, etc. If your family likes to go out to eat or shop, try enjoying time together that doesn’t require money, like cooking homemade meals and participating in a photography challenge (check Pinterest for ideas!).

Keep a Debt Calendar

Paying bills late, even by just a few days, can potentially have a negative impact on your credit. That’s why it is critical to remember your due dates! Set up calendar reminders on your phone or through whatever app or service you use to manage your schedule.

Rather than setting an alarm on your actual due date, set your calendar reminder for several days to one week prior to your due date so that you have plenty of time to make your payment. (If you’re still going old-school with paper checks or in-person payments for a bill, set your reminder even earlier!)

If you still have difficulty remembering to pay your bills on time, automating your payments may be the better tactic for you. However, there are some drawbacks to automated payments, which brings us to our next tip.

Pay Your Credit Card Bills Online Manually

Experts recommend setting up automatic payments to help ensure payments aren’t late or missed. Setting up automatic payments is a great idea for paying bills, but for credit card debt specifically, you may want to consider the benefit of making payments manually.

Here’s why: First, automatic payments will typically only pay the minimum payment amount due, unless you have specified another amount be paid. It’s “set it and forget it.” This means that it’s all too easy to forget to increase your payment amount or make additional payments so you can pay down your debt faster.

Also, when you’re scrupulously focused on a goal (like paying off your holiday debt), it can feel satisfying to go into your account and pay the bill. You see the balance, enter the amount and click to pay — think of it as a sense of accomplishment. You’re physically completing a task that leads you closer to your goal, helping you stay motivated for the next win you can input.

Only 22% of those polled in the MagnifyMoney survey will be able to pay off their debt in one month,1 which means around 78% will carry that debt month-to-month. By implementing these techniques and staying committed, you can set yourself up to tackle the debt in as few months as possible.

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Avoid Future Holiday Debt: 8 Tips for Next Year

  1. Use the Santa’s Bad app to manage your spending.
  2. Learn to say no to costly holiday parties or gift exchanges.
  3. Don’t buy gifts just to impress others.
  4. Agree on price limits for gifts with loved ones.
  5. Suggest a family gift exchange, rather than buying individual gifts.
  6. Start saving now for next year’s holiday expenses.
  7. Look for good deals throughout the year and shop early.
  8. Plan to shop solo to prevent the influence of big spenders.

Pay off debt without going crazy!



The material presented here is for educational purposes only and is not intended to be used as financial, investment or legal advice.