10% of Consumers Have Leftover Debt From the 2021 Holidays. Do These 3 Things to Pay Yours Off

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  • The longer you carry debt, the more it's apt to cost you.
  • There are steps you can take to eliminate debt in an expedited fashion.
  • Consider debt consolidation or getting a side hustle to make it easier to pay off, and getting on a budget can help you avoid holiday debt in the future.

If your debt is already a year old, it's time to start tackling it.

At this point, a lot of people are enjoying the 2022 holiday season and are doing their best not to rack up credit card debt in the course of celebrating it. But data from C+R Research reveals that 10% of consumers had lingering debt from the 2021 holiday season before this year's holidays even rolled around.

Carrying debt for a year or longer could be very detrimental to your finances, though. That's because credit card interest can compound on a daily basis, so that for each day longer you carry a balance, it costs you even more.

If you're carrying leftover credit card debt from 2021, or have accrued your share in 2022, it's important that you try to work your way out of that hole as quickly as you can. Here's how.

1. Look at debt consolidation

Debt consolidation may not just make your debt easier to manage; it could also make it less expensive to pay off.

Let's say you do a balance transfer. Many balance transfer credit cards give you a 0% introductory rate for a limited period of time on the balances you move over, so you get a break from accumulating interest as you work to pay your debt off.

You can also look at consolidating debt via a personal loan. You'll pay some amount of interest, but that rate may be substantially lower than what your current credit cards are charging you.

2. Get on a budget

You'll need to free up money consistently if your hope is to get rid of your debt. And a budget can help make that possible.

Once you start following a budget, you may gain a better understanding of what your bills look like and where your money goes every month. And that could, in turn, help you free up more money you can use to pay off your debt.

3. Take on a side hustle

Budgeting might help you better manage your money. But if you're already down to bare bones expenses and can't seem to find much spare cash month after month, then boosting your income could be your ticket to a quicker debt payoff. The good news is that the gig economy is nice and healthy, so you may find that it's fairly easy to go out and get yourself a side hustle.

Note that you will have to be careful, because the income you make from that gig will be taxable (this holds true even if you're paid in cash). So you can't just take all of your extra money and throw it at your debt. But once you've calculated what portion you owe the IRS, you can use the rest of your earnings for debt payoff purposes.

The fact that some consumers had leftover debt from 2021 at the start of this year's holiday season isn't at all surprising. But you should know that lingering debt is not a good thing. So if you can avoid that situation by eliminating your debt quickly, you'll be much better off for it.

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