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You spent too much on the holidays. Now what?

A balance transfer card or a personal loan are just two options to help you overcome a holiday spending hangover


The holiday season is especially expensive, and 2021 was no exception: retail sales grew by 8.5% over 2020 levels. If you overspent, here are some strategies for tackling your debt.

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A hangover isn’t fun, and overcoming a holiday debt hangover takes more time than sleeping off a little too much bubbly at your New Year’s Eve party.

Mastercard reports that in 2021 holiday retail sales gained 8.5% over 2020 levels. This reflects sales during the November 1 to December 24 period, excluding automobiles. Considering this, it’s likely that consumers took on more debt during the holidays.

The good news is that there are several debt relief remedies. I’d put 0% APR balance transfer cards at the top of the list.

Check out all the answers from our credit card experts.

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How 0% balance transfers work

Right now, you can avoid interest for up to 21 months when you transfer your existing debt to one of these cards:

The Citi® Diamond Preferred® Card, which has a regular APR of 13.74% to 23.74%. Its balance transfer fee is $5 or 5%, whichever is higher.

The Citi Simplicity® Card, which has a slightly higher regular variable APR (14.74% to 24.74%). The balance transfer fee is $5 or 5%, whichever is greater. One other stipulation is that transfers must be completed within four months of opening the account.

There’s also the Wells Fargo Reflect℠ Card, which has a standard balance-transfer offer of 18 months without interest, but extends it to as many as 21 months if cardholders make all of those payments on time. The regular variable APR is 12.99% to 24.99%. The balance transfer fee is the larger of $5 or 3% within 120 days of opening the account and $5 or 5% (whichever is greater) after that.

Consider your total debt load

The worst part about holiday debt is that it can make an already challenging situation even worse. The average American has $5,525 in credit card debt, according to Experian. That’s a lot of money, even though it’s down from $6,494 in 2019 and $5,897 in 2020.

It’s hard to separate holiday debt from preexisting debt, since half of people in credit card debt have been wrestling with it for at least a year, about a third for at least two years and about 1 in 7 for at least five years, our sister site reports.

But here’s the beauty of a 0% balance transfer card: You could make 21 equal payments of about $275 (including the one-time transfer fee) to completely knock out your credit card debt in less than two years without paying any interest.

Contrast that with minimum payments at the average credit card rate of 16.13%. Those begin at $130, but you’d be in debt for more than 16 years and would owe more than $6,000 in interest. That’s an incredible difference, and it highlights why a 0% balance transfer card can be such a valuable debt-payoff tool. If you have a credit score of 670 or above, as most Americans do, then you’re in the right ballpark. That’s a big change from last year when 0% balance transfers were much harder to obtain.

Take out a personal loan

Another popular form of debt consolidation is to take out a personal loan. The typical payback period is two to five years, so that longer term is a potential advantage over a balance transfer card. You won’t get a 0% rate, but you might be able to qualify for something in the 5% to 7% range if you have a strong credit score.

The average rate, however, is 10.46% according to Bankrate. And some borrowers with lower credit scores are charged upwards of 20%, so keep a close eye on your specific offer to determine whether or not it’s worth it.

Some credit cards have similar installment plans

American Express Pay It Plan It, Citi Flex Pay and My Chase Plan are examples of programs that function as a cross between traditional credit card debt and personal loans. Existing cardholders can designate certain 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%. Most of these card-related plans run anywhere from three months to a year. Sometimes you can stretch them out even longer.

Enroll in nonprofit credit counseling

Another option is nonprofit credit counseling. This is a hidden gem because the rates and terms of these debt management plans are often similar to the personal loan offers that people with better credit are able to obtain. And nonprofit credit counselors make them more widely available.

Reputable agencies, such as Money Management International and GreenPath, provide helpful advice, consolidate debt and negotiate lower rates with creditors. These debt management plans frequently run two to five 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).

Review your budget

In addition to the aforementioned strategies, 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, could you move to a cheaper apartment, drive a less expensive car or trim your dining budget without sacrificing too much happiness? Could you take on a side hustle? Sell some things you don’t need? Any additional money that you’re able to put toward your high-cost credit card debt will reduce how long you’re in debt and how much you owe in interest.

Bottom line

If you have credit card debt, it’s really important to come up with a good plan to knock it out ASAP. Think of it this way: Every dollar you pay off represents a guaranteed, tax-free return of whatever your interest rate is. Many credit cards are in the neighborhood of 15% to 20%. That’s a much higher return than you could reasonably expect to achieve without taking on a lot of risk.

Credit card debt is one of those things that’s easy to get into and hard to get out of. Still, I’m confident that these strategies will help you get out from under your debt. Once you’ve done so, it will be a lot easier to build wealth and get compound interest working for your investments rather than paying 15% or more to a credit card issuer.

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

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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.

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