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How to Repay Holiday Debt

How to Repay Holiday Debt

Between the glitzy advertisements and the festive decor, it’s easy to get caught up in the holiday spirit and spend more than you should. In fact, according to an article from CNBC, Americans are expected to spend about $1,455 each this season, and that number doesn't even take into account expenses like travel or decorations.

If you don’t have that much money tucked away in savings — and many people don’t — you’ll likely turn to credit cards, instead. Once the Christmas tree is taken down, you may be left with a hefty credit card statement and sky-high interest rates. If that’s the case, don’t despair! Here’s what you need to know to pay off your holiday debt.

5 ways to pay off holiday debt

If you have holiday debt, it’s important to come up with a plan of attack to pay it down as quickly as possible. If you’re not sure where to start, use these five tips:

1. Create a budget

First, you need to know how much money you have to work with. Start by listing all of the income you have coming in each month, such as your salary, rental earnings, or alimony. Then, list all of your regular monthly expenses, such as rent, utilities, car insurance, groceries, internet service, and your cell phone bill.

Your income should outpace our expenses, and any surplus money you have you can allocate toward your debt.

If you’re barely breaking even, look for ways to cut back. Perhaps you can shop around for cheaper car insurance, or skip eating out to save on food. Reducing your expenses can free up more cash for debt repayment.

2. Consider debt consolidation

According to the Federal Reserve, the average interest rate on a credit card is 18.43%. With such a high rate, your balance can quickly grow, causing you to owe far more than you originally charged.

One way to tackle your credit card balances is to consolidate your debt by taking out a personal loan. With this approach, you take out a loan for the amount of your debt, using it to pay off your high-interest credit cards. Personal loans can have much lower interest rates than credit cards — some personal loan lenders offer rates as low as 4.99% — and have fixed repayment terms, helping you save a significant amount of money.

3. Complete a balance transfer

If you have good credit, another option to consider is completing a balance transfer. With this strategy, you transfer your balance to a card with a low interest rate, giving you time to down your debt without paying interest fees.

One card to look at is the Chase Freedom Unlimited® card. It offers a 0% Intro APR for 15 months from account opening on balance transfers. That promotional period gives you over a year to pay down your debt without paying interest. After that introductory period expires, a variable APR of 20.49% - 29.24%% will apply.

Chase Freedom Unlimited®

Credit Recommended (660-850):
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Chase Freedom Unlimited®
Editor’s Rating: 4.7
Credit Recommended (660-850):
Rewards Rate 1
1.5% - 5% cash back
Intro (Purchases)
0% Intro APR on Purchases 15 months
Annual Fee
Learn More on the Chase secure website.
Intro Rewards Bonus
Up to $300 cash back
Intro (Transfers)
0% Intro APR on Balance Transfers 15 months
Regular APR
20.49% - 29.24% Variable


  • INTRO OFFER: Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!
  • Enjoy 6.5% cash back on travel purchased through Chase Travel, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year).
  • After your first year or $20,000 spent, enjoy 5% cash back on travel purchased through Chase Travel, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.
  • No minimum to redeem for cash back. You can choose to receive a statement credit or direct deposit into most U.S. checking and savings accounts. Cash Back rewards do not expire as long as your account is open!
  • Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 20.49% - 29.24%.
  • No annual fee – You won't have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
  • Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
  • Member FDIC
See additional details for Chase Freedom Unlimited®

4. Pick up a side hustle

If you don’t have a lot of money left over each month for debt repayment, think about boosting your income by picking up a side hustle. Unlike traditional part-time jobs, which have fixed schedules, side hustles allow you to work whenever it’s convenient for you, and there’s no need to commit to a certain number of hours per week.

You can earn extra income by delivering groceries with Shipt, driving for Uber, cleaning houses with Handy, or doing odd jobs with TaskRabbit. Depending on what side gig you choose, you could earn up to $20 per hour, which can accelerate your debt repayment.

5. Pay off the debt with the highest interest rate first

The most cost-effective way to pay off your debt is the debt avalanche method. With this technique, you make the minimum payments on all of your debt, but you put any extra money you have toward the credit card with the highest interest rate first. By focusing on the card with the highest interest rate rather than the lowest balance, you’ll save more money over the length of your repayment.

Managing your holiday debt

If you have debt after the holidays, you’re not alone; It’s a common problem. However, it can be a serious one, so it’s important to come up with a repayment strategy so you can pay off your credit card balances as soon as possible. By using these tips, you can get out of debt, and save money in the process, putting you in a more secure financial position for next year’s holiday season.

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