How To Pay Off Holiday Debt

By Minh Tong Reviewed by Melissa Cook Updated Dec 12, 2022
How To Pay Off Holiday Debt

Holiday debt has become a significant problem in the US, with many Americans falling into debt due to their holiday spending. Unfortunately, most people cannot afford to take on this kind of debt year after year. Recent studies have shown that holiday debt is a major issue for millions of Americans. An estimated 42% of all US households are expected to carry some sort of holiday debt into the new year.

Why does overspending happen during the holidays?

Overspending during the holiday season can happen in several ways. However, the most common reasons for overspending are:

Credit Cards
The most common reason for overspending during the holiday season is when people use credit cards to finance their holidays and don’t have a plan to immediately pay it off. Leaving high amounts of debt on a credit card can be expensive due to interest rates that add up over time.

Uncontrolled Spending
Another factor contributing to holiday debt is the tendency for people to spend more during the holidays than they can afford simply because it’s that special time of year. People may feel guilty about not spending as much money on gifts or getting as many gifts as their family and friends, leading to overspending.

Holiday Deals
One key factor contributing to holiday debt is the pressure to spend more money than people can afford. Many retailers and marketers try to lure consumers into spending more by using things like “buy one, get one free” or other promotions that make it seem like they’re getting a great deal. In reality, however, this often increases people’s likelihood of overspending on holiday shopping.

How to pay off holiday debt

If you’ve racked up a lot of holiday debt, it’s important to start thinking about how you can pay off that debt as quickly as possible. There are several different strategies you can use to tackle your debt, including:

Set a budget
One of the most effective strategies for dealing with holiday debt is to create a budget and stick to it. This can help you determine how much money you have available each month for paying off your debt, as well as identify areas where you may be spending too much. Once you’ve created your budget, try to allocate more funds each month towards your credit card debt, even if it means cutting back spending in other areas of your life.

Make extra credit card payments
Another effective strategy for paying off holiday debt is to make extra payments towards your credit card each month. Even if you can only afford to pay an extra $20 or $50 per month, that small amount can help reduce the overall balance on your card, as well as save you money in interest charges. Additionally, consider transferring your balance to a low-interest credit card if you have good credit and are able to qualify for one.

Don’t use your credit cards
Another strategy for avoiding holiday debt is to avoid using credit cards as much as possible during this time of year. The best way to pay for your holiday purchases is with cash or a debit card instead of a credit card. It’s also a good practice to monitor your spending throughout the holidays to keep it manageable, even if you are sticking to a budget.

Get a debt consolidation loan
A debt consolidation loan may be an option if your debt is primarily credit card debt. This type of loan allows you to combine several different loans into one, which can make it easier to keep track of your payments and save money in interest charges. Additionally, a nonprofit credit counseling service may be able to help you get out of debt faster by showing you how to manage your finances better and create a plan


It’s not always easy to avoid overspending during the holidays, but by being aware of the factors contributing to this problem and taking steps to avoid falling into these spending patterns, you can reduce the risk of experiencing holiday debt and its negative consequences.

If you need help paying off burdensome holiday debt, give the debt professionals at Americor a call today.


Minh Tong

Minh leverages decades of experience in marketing, sales management and technology to provide high-level advice and lead new initiatives. Minh has a Bachelor of Science in Business/Managerial Economics from University of California at Irvine. He brings over 20 years of sales and executive management experience to the company and his responsibilities include customer service improvement, professional development, and carrying out communications and marketing. Originally from the east coast, Minh resides in southern California and enjoys spending time with his family, going to the beach, and playing a variety of sports.