What You Shouldn’t Do with Your Holiday Credit Card Debt, and How to Avoid a Repeat Next Year

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Holiday credit card debt is kind of like the flu. Once you have it, it tends to stick around for a while. If you find yourself overwhelmed with holiday credit card debt, you’re not alone. Here are five simple ways to avoid a repeat of your credit card debt next year. (Updated for 2020)


Every year after the holidays, millions of Americans complete their holiday festivities by traveling home, going back to work, returning unwanted gifts and enter the year with aspirations of sticking to their new year resolutions.

Then about mid to late January, many will receive their first credit card statement or statements. Detailing just how much they spent over the holiday season. Which then leads to the realization and sometimes regret, that there are a whole bunch of bills to be paid.

On average, Americans charge over $1,000 each year during the holidays. If you’re finding yourself stressed with holiday credit card debt, here are a couple of things you shouldn’t do with your debt.

And two things you can do to avoid a repeat next year.



Holiday Credit Card Debt, What You Shouldn't Do with that Card Debt



What You Shouldn’t Do With Your Holiday Credit Card Debt

Only Pay the Minimum Amount Due

The good news is credit cards provide flexible payment options as long as you make the minimum monthly payment. The bad news is credit cards provide flexible payment options as long as you make the minimum monthly payment.

Paying the minimum amount due on your credit card balance is a definitive, absolute, 100% guaranteed way to make sure that your credit card debt stays with you until the next holiday season. To use the Buzz Lightyear catchphrase from Toy Story, your likely to have your credit card debt from here to “infinity and beyond.”

If you have racked up $1,000 in credit card debt over the holidays, and your required minimum payment is $20 per month it will take you 12 years and 6 months to pay off the debt. In addition, the $1,000 you charged will now cost you $2,396.

Are you serious about paying off your holiday credit card debt?

The only way to tackle that debt is to make more than the minimum payment. Here at Filling The Pig, we recommend the snowball method to eliminate credit card debt. It’s a simple strategy to implement and can be used as a debt elimination tool for all kinds of debt, not just credit cards. In addition, use a free credit scoring service like Credit Karma to help monitor and manage your credit cards.


If you’re not familiar with the Snowball Method be sure to read How to Pay Off Debt Fast Using the Snowball Method, or watch my YouTube video.

Transfer Your Credit Card Balance to a 0% Balance Transfer Offer – NOT

Balance transfer offers that provide 0% interest for 12, 18 or 21 months can look pretty appealing after the holidays. In fact, January is when most credit card companies start promoting their balance transfer offers as a payoff strategy. However, these offers are just another method of prolonging the payoff of your debt, and in most cases won’t help you.

Balance transfer offers are a credit card marketing gimmick. They are designed by credit card companies to attract new credit cardholders. The credit card companies know that:

  • Most of the balance transfers that take place are by individuals already in credit card debt. Which is what makes the 0% balance transfer offer so appealing.
  • Once a balance is transferred it is likely the cardholder will only make the minimum payment during the 0% introductory period. They know they will eventually be able to charge you interest once the introductory period is over.
  • The probability is high that once you receive your new credit card (provided with the offer), you will start charging on that credit card as well. You will accumulate more debt on the new card you just transferred a balance too.

Transferring credit card debt to a 0% balance transfer offer only prolongs the inevitable – that you will stay in credit card debt. In addition, it adds another credit card to your collection.

Approaching your credit card debt head-on is the only way to successfully manage your way out of debt. Leverage a strategy like the Snowball Method to pay your way out of debt. 0% balance transfer offers only guarantee that you will have that debt next year.

To learn more about 0% balance transfer offers, be sure to read Should You Use a 0% Balance Transfer Offer to Pay Off Debt?

Tap Your Emergency Fund

If you have been able to stash cash for an emergency fund, then you’re already in a better financial position than 30% of the adults in the US. (Bankrate 2019 Survey)

Emergency funds are for emergencies. Those unanticipated expenses that happen in life. The things we can’t control. Unfortunately, holiday credit card debt falls into the “self-inflicted” category.

Using your emergency fund to pay off credit card debt will increase your exposure to more debt. Like a vehicle breakdown, unexpected medical expenses or the fridge that stops working. Not having an emergency fund will set you back financially and force you to take on more debt.

Save your emergency fund for an emergency. Review your finances and find another way to pay off your credit card debt.

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0% Balance Transfer Offers eventually lead to Groundhog Day

Groundhog Day – A series of events that happens over and over again


How to Avoid a Repeat Next Year – Groundhog Day

In the 1993 comedy film Groundhog Day, Bill Murray plays a weatherman who is given a special assignment to cover a Groundhog Day event in Pennsylvania. After the event, he is thrown into a time-loop where the events of the day are repeated over and over again. (You will have to watch the movie if you want to find out the ending).

Groundhog Day is now a term that is often used to reference a series of events that happen over and over again.

There’s only one thing worse than this year’s holiday credit card debt. It’s repeating the whole process over next year. If every year your January credit card statement(s) are starting to feel like Groundhog Day, then maybe it’s time to take a different approach to your holiday spending. An approach that does not require credit cards.

To avoid racking up more holiday credit card debt, here are two things you can do to change next year’s outcome.

Reduce The Number of Credit Cards You Have to One

If you have multiple credit cards it’s likely that during the holiday season you probably lost track of how much you were actually charging.  In addition, once the bills start arriving it’s possible you could lose track of what you’re supposed to be paying.

If you want to successfully manage your credit card debt, get rid of all your credit cards but one. Managing one credit card simplifies the charge-it, pay-for-it process. One credit means you are less likely to overspend during the next holiday season and blow your budget.


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Create a Savings Plan for Next Year

They used to call them Christmas club accounts. Christmas club accounts were short-term savings accounts offered by banks and credit unions. Money could be deposited throughout the year and then withdrawn during the holidays. The idea was that if you started saving for the holidays at the start of the year, you could avoid blowing your budget at the end of the year. Regardless of what you call the savings account. Creating a savings plan for the holidays next year will help keep you from using your credit cards.

Simply set up a savings account at your local bank. Have money from your paycheck direct deposited into the account. $10, $20, $50, $100. Whatever you can afford per paycheck will grow your holiday savings account for next year. In addition, throughout the year you can further add to those funds by selling stuff, birthday money, spare change…what have you. The goal is to create a savings plan at the start of the year, to avoid having to use your credit cards at the end of the year.

In Summary

The average American household has a little over $15,000 in credit card debt. I have no doubt that much of this debt can be attributed to the holidays. Credit card debt that gets carried from one year to the next. If you’re struggling and stressed with holiday credit card debt. Try these simple steps to adjust your approach to spending during the holidays and avoid Groundhog Day next year.


Helpful Resources:


Do you have a recommendation on how to pay off holiday credit card debt? Comment below.





Kevin is the owner of FTP and the author of the personal finance book series Filling The Pig. He uses his past successes and failures with debt, saving cash, investing and running home-based businesses to educate others about successful money managment and Creating a Lifestyle of Opportunities.

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