4 Simple Steps to Pay Off Holiday Debt

It’s been about a month since the holidays were in full swing, and depending on how disciplined or overly generous you were with your gift choices, you may have some lingering holiday spirit… credit card debt.


Marcus by Goldman Sachs estimated that 48% of Americans go into credit card debt during the holidays. And in a 2018 survey, NerdWallet found that over 25% of Americans were still paying off debt from the 2017 holiday season as they were entering the 2018 holiday season.

Unfortunately, societal expectations to buy, spend, and give generously during the holidays pressure many into unnecessary, expensive credit card debt. And just like you need to take action to burn off those extra calories consumed during the holidays, you must do the same with your debt.

To help you tackle that lingering financial weight, here are four simple steps to pay off your holiday credit card debt:

#1 - Know how much you owe

First and foremost, you need to face the financial responsibility that your past self shoved forward onto your current self. This first step may be a little intimidating or even painful, but it’s the most important one. If you were swiping your card left and right in November and December, you may be completely oblivious to just how much you spent on holiday “cheer”.

Confront your balance (or balances if you used multiple cards). Add them up. Then write down the total in a spreadsheet or on paper.

#2 - Look for immediate solutions

Do you have any extra funds to throw at that debt right now? Your checking or savings accounts are the first place to look. If you have a full e-fund, meaning 6-months’ worth of expenses, you may want to consider using a portion of your emergency fund to pay off some of your debt too.

ReisUP How to pay off holiday credit card debt

Normally I wouldn’t recommend using your rainy day money for anything but an emergency, but credit card debt is nasty and balloons quickly. Depending on your financial situation, it may be in your best interest to use some of your e-fund to pay down debt, then figure out a plan to replenish it over the next few months.

Another option may be to transfer the balance to a zero interest credit card that you could pay off over three to six months without paying high cost interest. You could also sell any gift cards you received over the holidays and use that money to pay off some of your debt.

You’ve got to be willing to do things a little differently to get rid of holiday debt!

One place you should NOT look for money to pay off your credit card debt is your retirement account. While some 401(k) plans allow loans, the money in that account needs to stay there for the long haul, otherwise you won’t be able to take full advantage of compound interest.

#3 - Set your goal

If you can’t afford to pay off the full balance this month, when do you want to pay it off by? In two months?... Three months?.... Six months?

Pick a date - and be aggressive! The longer that debt exists, the more money and effort it’s going to take to get rid of.

#4 - Create a game plan

Last but not least, create a plan to achieve your goal. Figure out how much money you’re going to have to throw at your holiday debt each month to get there.

Will you have that much extra cash flow every month to dedicate to paying down your debt? If not, how could you lower your expenses for a few months to make it happen? Could you switch up your commute to save money? Cut cable? Cook more at home instead of going to restaurants or ordering takeout?

Scan your budget to find consistent sources of cash. And if you don’t have a budget, now’s the time to make one! Make your debt payments line item a top priority in your budget, and your debt will dwindle in no time.

Or, instead of lowering expenses, is there a way to increase your income to pay off your holiday debt faster? Could you make some money on the side to boost your debt payments?

Get creative! The more open you are to trying new things and strategies, the faster you’ll be able to kick your holiday debt to the curb.


As intimidating as facing holiday debt might be, tackling it can be as simple as facing the amount, setting a debt free goal, and creating a plan to get there.

How do you plan to tackle your holiday debt?

Post a comment below to let me know!


Tara Falcone, CFA, CFP® | Facebook: ReisUP | Twitter: @reisupllc | Instagram: @reisupllc