6 Tips for Paying Off Holiday Debt

large family unwrapping Christmas gifts
The wrapping paper has been gathered and recycled. The children have run off to play with their new toys. Everyone else is sharing their holiday highlights on social media. Now it’s time to tackle any credit card debt you may have accumulated from your Christmas gift shopping.

Branch Manager Sarah Adkins shares tips on paying off holiday purchases you made this year – including how to pay them off faster.

Make a Plan

No matter how large or small the amount of debt, taking time to formulate a payoff plan is key. You don’t want to pay unnecessary fees or interest charges because you meant to send in a payment but forgot.

You know your habits best. Perhaps for you making a plan involves a calendar with written reminders and payment amounts. Others might find scheduling payments with their credit card company more beneficial. And of course, our mobile devices have many options for reminders and debt calculators.

Hopefully, setting a clear course of action will make the debt feel manageable.

Schedule Extra Payments

You can shorten the life of your debt by making additional payments.

If you feel nervous about how paying on your debt twice a month instead of monthly could affect your budget, you could make an additional regular payment in months you have more flexibility. If you can do this most months, this will also reduce interest charges.

Find the Wins

In times when paying off debt feels overwhelming, it’s acceptable to find wins where you can.

Conventional wisdom says to pay off the credit card or loan with the highest interest rate first to save on interest charges. When making your payoff plan, however, you may also choose to pay off a smaller debt first to get started on the right foot.

For example, did you open a new store credit card to get a discount on a gift? You may decide to pay off that one item first versus tackling a larger credit card balance.

Open a New Credit Card

If your debt is spread out over multiple credit cards, simplifying them under one banner can be a great option. Debt consolidation using a new line of credit is known as a credit card balance transfer.

Opening a new credit card can be beneficial as new cards often come with very low initial interest rates and allow you to transfer debt from your other cards for low entry fees. Some may cards offer a 0% introductory APR when you first open it, for a limited time period, on balances that are transferred to it. Your goal would be to transfer debt onto this new card and do your best to pay down as much of the balance during the interest-free period.

Considering a Balance Transfer

Icon for Considering a Balance Transfer
Icon for Considering a Balance Transfer
When considering a balance transfer method of paying down debt, carefully consider and review the stipulations of the new card’s interest rate.

Ask the following questions:
  • When does the 0% interest introductory period end?
  • How much will the interest rate increase after the introductory period?
  • What is the maximum amount that can be transferred to the lower-cost credit card?

Communicate with Partners

For those with shared finances, you’ll want to communicate about how the household budget will be affected until the debt is paid off. You may jointly decide to put other purchases on hold or temporarily reduce optional expenses like going out to eat or purchasing new clothes.

Make Some Extra Dough

A temporary job can be a good solution for those wanting to pay off debt without dipping into savings or forgoing extra expenses. Many job sites allow you to post free profiles for jobs like dog sitting, lawn maintenance or delivery driver. With these types of jobs, you can typically pick and choose when you’re available to work.

If you decide to pick up a semi-permanent part-time job, make sure that any costs you incur for uniforms, training or screenings are factored into your payoff plan.

Want to start saving for next year’s Christmas gifts? Learn about our Holiday Savings Account.

About the Author: Sarah Adkins has been in banking for just over 22 years in several capacities: teller, customer service and branch manager. She joined SouthState as a branch manager 16 years ago and currently manages the Fort Mill Dave Gibson branch.

  • This content is general in nature and provided for informational use only. Content may be used in connection with the advertising and marketing of products and services offered by SouthState Bank, N.A. and its subsidiaries and affiliates. This is not to be considered legal, tax, accounting, financial or investment advice. You should seek individualized advice from personal financial, legal, tax and/or other professionals, as appropriate depending on the specific facts of your situation. We do not make any warranties as to the completeness or accuracy of this information and have no liability for your use of this information.

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