Cashing In Q&A columns

Post-holiday credit card bills getting you down?


Credit card bill-paying tactics that can help you deal with high post holiday card payments.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

The first few months of every new year bring bad tidings in the form of credit card bills. While the holidays are a time of free spending and frivolity, January and February are often the hangover after the big party. But there are options for those who find themselves in the high-interest hot seat.

Credit card balance transfers

Two words describe the wisest course of action for those who have high-rate cards: balance transfer. Though 0 percent balance transfer offers may not be as common in these tough economic times, virtually every credit card issuer still has several credit card products tailored to consumers burdened by high-interest balances held with other banks or financial institutions. In most cases, banks will compete to gain access to your balances because they realize that once you carry their credit card in your wallet, you will be a long-term customer. Call it the force of inertia, but it is generally true that most consumers will stay with their present credit card product for at least four years.

But buyers beware: Michael McAuliffe, president of Family Credit Counseling Service, says if you're not careful, balance transfers can be a dangerous game. "A lot of the lenders offer them because they know that they're not going to have it paid off by the time the introductory rate is over. You can end up paying off one card with another, so you are still in debt."

McAuliffe first suggests avoiding shopping during the holidays with a credit card altogether, and to turn down offers for store credit cards, which have high interest rates. "We get caught up in holiday lights and feel of the season and spend more money, even though we may go in with a list and say we will only spend a certain amount. We lose perspective and go way over, and the later you do your shopping, the more you spend. If you're already carrying a credit card balance, do your holiday shopping with a check or debit card." If you have already made the mistake of going wild with your plastic, McAuliffe says to find a balance transfer card with a lower rate and cancel the other card -- or even cut up the card to make sure you're not tempted to use it until the other is paid off.

If you have a strong loyalty to your current card but it is charging high interest, you still have options. It can be beneficial to contact your current bank to discuss having them lower your rate. It never hurts to ask, but be wary of threatening to take your business elsewhere -- unless you have the good credit or excellent credit that will command the best rates from another card issuer.

Regardless of which credit card you carry, having a low interest rate should be your goal if you tend to have an outstanding balance from month to month. While it might not be feasible or even advisable to switch credit cards every time your introductory annual percentage rate expires, it's a smart strategy to shop and compare balance transfer offers every few years. That way you can be sure you are enjoying the lowest rates in the marketplace over time.

See related:How to cancel a credit card, Balance transfer calculator

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Cashing In Q&A columns

How to cope until new credit card rules take effect

Even though regulators have approved tough new credit card rules, consumers still must watch out for tricks and traps of the credit card game. Here’s a checklist of what to do.

See more stories
Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more