You spent too much on the holidays. Now what?

Credit card debt can be really expensive. About half of Americans have it, and the average amount is $6,300, according to the Federal Reserve. The holiday season is especially expensive, and 2020 was no exception: spending grew by 8.3% over 2019.

If you overspent this holiday season, here are some strategies for tackling your debt.

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Get a balance transfer card

Zero percent balance transfer credit cards are great, although they’ve gotten harder to obtain during the pandemic. If you have proof of sufficient income and a good credit score – at least 700, although 720 or 740 would make you a stronger applicant – you might still be able to qualify. The longest 0% promotion is 20 months on the U.S. Bank Visa Platinum Card. It has a 3% transfer fee (minimum $5), and after the promo, the regular APR ranges from 13.99 to 23.99%. The longest 0% promotion without a transfer fee is 12 months, offered by the Navy Federal Credit Union Platinum card (which has a regular APR of 5.99% to 18%) and the First Technology Federal Credit Union Platinum Mastercard (regular APR: 6.99% to 18%).

Take out a personal loan

Another popular debt payoff method is a personal loan. Someone with good credit might be able to get a rate as low as 5% or so. However, the terms vary widely. The average personal loan rate is close to 12%, according to our sister site Borrowers with lower credit scores can be charged 20% or more. The typical term is anywhere from one to five years.

Card companies have their own versions of these that don’t require additional underwriting – for example: American Express Pay It Plan It, Citi Flex Pay and My Chase Plan. Existing cardholders can designate purchases to be paid off in installments, giving them more predictability and a lower interest rate. These companies often prefer to call it a plan fee rather than interest, but it’s basically interest. The equivalent APR is generally something like 6 to 10% for a plan paid off within a year or so. Most of these card-related plans last anywhere from three months to a year, although sometimes you can stretch them out longer.

See related: Buy now, pay later with installment payment services

Enroll in nonprofit credit counseling

Another option is nonprofit credit counseling, which is generally much easier to qualify for. There are some great agencies like Money Management International and GreenPath that provide helpful advice, consolidate debt and negotiate lower rates with creditors. These debt management plans frequently last 2-5 years and carry interest rates in the 6 to 10% range. Nonprofit credit counseling is best suited for people who owe at least a few thousand dollars in unsecured debt (credit cards and medical debt, mostly).

Ask for a lower rate

You can also ask your current card issuer for a lower rate: 78% of cardholders who tried that strategy were successful in 2020. To improve your odds, come armed with competing offers that you received in the mail or saw online. It also helps if you’re a good customer who has been with them a while and pays on time.

Avoid the minimum payment trap

However you decide to pay off your debt, always pay as much as you reasonably can – even if that’s significantly higher than the minimum payment. Just $1,000 of holiday debt can really cost you if you’re only paying the minimum. If your credit card interest rate is 16.05% (the national average) and you’re paying a 3% minimum payment, it would take you just over 7 years to pay off the balance and you’d end up paying more than $500 in interest.

Review your budget

If you are struggling to find the money to pay more than the minimum, take a hard look at your income and expenses. Identify areas that you can cut back, particularly subscriptions you’re not using and large expenses. For instance, can you move to a cheaper apartment, drive a less expensive car or trim your dining budget without sacrificing too much happiness?

See related: How to create a budget and stick to it

Bottom line

People get into credit card debt for many different reasons. Contrary to popular belief, it’s usually not because you splurged on a vacation or holiday gifts. The most common explanations are emergencies (e.g., medical bills and car and home repairs) and day-to-day expenses, according to a March 2020 survey.

That same survey found that 56% of Americans with credit card debt have been in the red for at least a year, including 25% who have been in debt for at least three years and 15% for at least five years. Carrying long-term credit card debt can cripple your finances, so follow these steps to pay it down as soon as possible.

Have a question about credit cards? E-mail me at and I’d be happy to help.