Skip to main content
Advertiser Disclosure
We do receive compensation from some partners whose offers appear on this page. We have not reviewed all available products or offers. Compensation may impact the order in which offers appear on page, but our editorial opinions and ratings are not influenced by compensation.

The Ascent Logo The Ascent Logo - Blue circle with an A in it and the ascent a motley fool company to the right of that

  • Credit Cards
  • Banking
  • Brokerages
  • Loans
  • Mortgages
  • Knowledge
  • Latest Picks
  • Search Icon Click here to search

Credit Cards

Top Picks
  • Best of January 2021
  • Cash Back
  • Balance Transfer
  • Travel
  • 0% APR
  • Rewards
  • Bad Credit
Knowledge
  • Beginners Guide to Credit Cards
  • How to Rebuild Your Credit
  • Maximize Your Credit Card Rewards
  • Learn More About Credit Cards
Credit Card Tools
  • Compare Cards
Looking for a new credit card?

Explore the best credit cards in every category as of January 2021.

Get started!

Banking

Top Picks
  • Best Savings Accounts
  • Best Bank Accounts
  • Best Money Market Accounts
  • Best CDs
  • Best Checking Account Bonuses
Knowledge
  • Beginners Guide to Banking
  • Everything You Need to Know About Savings
  • Money Market Accounts Made Easy
  • Learn More About Banking
Looking for a place to park your cash?

Check out our top picks of the best online savings accounts for January 2021.

Get Started!

Brokerages

Top Picks
  • Best Brokers of January 2021
  • Best Online Brokers for Beginners
  • Best Options Brokers
  • Best IRA Accounts
  • Best Roth IRA Accounts
  • Best Robo Advisors
Knowledge
  • How to Open a Brokerage Account
  • Beginner's Guide to Brokerages
  • Learn More About Brokerage
Just getting started?

Explore our picks of the best brokerage accounts for beginners for January 2021.

Get Started!

Loans

Top Picks
  • Best Loans of January 2021
  • Best Personal Loans for Bad Credit
  • Best Loans for Debt Consolidation
  • Best Low-Interest Personal Loans
  • Best Personal Loans for Good Credit
  • Best Personal Loans for Fair Credit
Knowledge
  • Personal Loans Made Easy
  • Debt Consolidation Guide
  • How to Pay Off Debt
  • Learn More About Loans
Thinking about taking out a loan?

Before you apply for a personal loan, here's what you need to know.

Get Started!

Mortgages

Top Picks
  • Best Mortgage Lenders of January 2021
  • Best Mortgage Lenders for Poor Credit
  • Best Refinance Lenders
  • Best VA Mortgage Lenders
Knowledge
  • First Time Homebuyers Guide
  • Home Loans Made Easy
  • The Complete Guide to Refinancing
  • How to Get a Mortgage with Bad Credit
  • Learn More About Mortgages
Tools & Calculators
  • Mortgage Calculator
Compare Rates
  • Today's Mortgage Rates
  • Refinance Rates
  • 15-Year Mortgage Rates
  • 20-Year Mortgage Rates
  • 30-Year Mortgage Rates
  • Jumbo Mortgage Rates
  • VA Loan Rates
  • 5/1 ARM Rates
  • 7/1 ARM Rates
  • FHA Mortgage Rates

Knowledge

Knowledge Section
  • All Articles
  • Credit Card Articles
  • Banking Articles
  • Brokerage Articles
  • Personal Loan Articles
  • Mortgage Articles
  • Personal Finance Articles
Recent Articles
  • Stimulus Check Update: $1,400 Checks Now on the Table

    Personal Finance

    Stimulus Check Update: $1,400 Checks Now on the Table
  • Weekly Mortgage News Roundup for Jan. 15, 2021

    Mortgages

    Weekly Mortgage News Roundup for Jan. 15, 2021
  • When Should You Sell Your Home? The Benefits of Each Season

    Mortgages

    When Should You Sell Your Home? The Benefits of Each Season
  • Current Mortgage Refinance Rates -- January 15, 2021: Rates Continue to Rise

    Mortgages

    Current Mortgage Refinance Rates -- January 15, 2021: Rates Continue to Rise
  • The Ascent
  • Knowledge
  • Credit Cards

Your 3-Point Holiday Debt Payoff Plan

by Maurie Backman | Dec. 22, 2019

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Landed in debt during the holidays? Here's how to recover. 

The holidays are an expensive time of year, and even if you save and budget for them in advance, you might still land in a position where you're sitting on a pile of credit card debt by the time the season wraps up. If you racked up a bunch of debt in the course of the 2019 holidays, you're probably bummed to start the new year off in the hole. 

But here's some good news -- with the right strategy, you might manage to kick that debt sooner than expected. That way you can avoid it hanging over your head for months on end, costing you interest all the while. Here's an easy but effective way to tackle your holiday debt quickly. 

A woman writing a to-do list next to wrapped gifts.

Image source: Getty Images

Step 1: Identify your most expensive debts

If you're carrying a balance from the holidays on a single credit card, then you're only dealing with a single interest rate. But if you're facing outstanding charges on multiple cards, then you'll need to figure out which are costing you the most interest-wise, because those are the ones you'll want to tackle first. 

Keep in mind that it could make sense to pay off a larger balance before a smaller one if the former has a higher interest rate attached to it. Say you're sitting on a $200 balance on one credit card and a $750 balance on another. You may be inclined to target the $200 balance first, since it's an easier sum to get rid of. But if that $200 balance comes with a 12% interest rate and your $750 balance comes with an interest rate of 17%, then your first goal should be to chip away at that $750. 

Step 2: Find ways to lower the interest rate on your debt

The interest rate initially attached to your credit card debt may not be the amount you ultimately have to pay. If you qualify for a balance transfer, which is feasible if you have a strong enough credit score, then you can move your existing credit card balances onto a single card with a lower interest rate. Not only will that make your debt easier to pay off logistically, but it'll also save you money in the course of your repayment. 

Another option you might pursue is consolidating your existing credit card balances into a single personal loan -- one with a reasonable interest rate -- and then paying that loan off instead of dealing with multiple credit card payments. Again, this may be an option if your credit score is in good shape. 

Step 3: Drum up extra cash to pay down that debt

Once you've figured out which lingering holiday debts are the most expensive, and you've also explored your options to make them cheaper interest-wise, you'll need to find a way to scrounge up extra money to chip away at them until they're gone. And you have several options in this regard.

First, you can try tightening up your budget so you're spending less month after month. That could mean canceling cable, paying less for entertainment outside the home, or even going to more extreme lengths like moving to a cheaper apartment. That may not be necessary if you're sitting on a small amount of debt, but if you're thousands in the hole and it's relatively easy to move, it could be worth it. 

You can also try getting yourself a second job on top of your main one. Once you pay your taxes on your extra earnings, the rest of that side income will be available for debt payoff purposes, as it won't be earmarked for existing bills.

Finally, you can use any extra money you come into in the course of the year to pay down your debt. That additional cash could come in the form of a tax refund, a performance bonus, or even an extra-generous birthday gift from a family member. 

Starting the new year off with holiday debt is an unquestionable drag. If that's where you're at, don't despair. Instead, pledge to tackle the problem efficiently so that by the time the next holiday season rolls around, you can approach it with a clear head and a clean slate.

Our credit card expert uses the card we reveal below, and it could earn you $1,148 (seriously)

As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases into 2022, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

About the Author

Maurie Backman
Maurie Backman icon-button-linkedin-2x

Maurie Backman is a personal finance writer who covers everything from savings to retirement to healthcare. Her articles have appeared broadly on major outlets such as CNBC, MSN, and Yahoo.

Share This Page
Blue Facebook Icon Share this website with Facebook
Blue Twitter Icon Share this website with Twitter
Blue LinkedIn Icon Share this website with LinkedIn
Blue Mail Icon Share this website by email

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Related Articles

Credit cards on a desk image for Best Credit Cards for 2021

Best Credit Cards for 2021

Interest spelled out on a calculator image for Compare Credit Cards Side by Side

Compare Credit Cards Side by Side

Man holding cash image for How Do Cash Back Credit Cards Work?

How Do Cash Back Credit Cards Work?

Cyber security and computer screen image for How to Protect Yourself from Credit Card Fraud

How to Protect Yourself from Credit Card Fraud

Featured Articles

Best Credit Cards for 2021

Compare Credit Cards Side by Side

How Do Cash Back Credit Cards Work?

How to Protect Yourself from Credit Card Fraud


We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

The Ascent Logo

The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.

btn_facebook-yellow btn_twitter-yellow btn_instagram-yellow

Copyright © 2018 - 2021 The Ascent. All rights reserved.

About The Ascent
About Us Contact Us Newsroom How We Make Money Editorial Integrity Ratings Methodology
Legal
Terms of Use Privacy Policy Accessibility Policy Terms and Conditions Copyright, Trademark and Patent Information
Learn
Credit Cards Banking Brokerage Loans Recent Articles

By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.

Back to The Motley Fool