The National Retail Federation (NRF) reports that the average shopper plans to spend $890.49 this holiday season on gifts, food, decorations, and other festive extras. While some people have cash saved up, plenty of others will end up swiping their credit cards to cover at least part of the cost.
But, with credit card interest rates topping 20%, those holiday purchases can quickly turn into long-term debt. In addition to gifts, other holiday-related costs—such as travel, meals, and impulse purchases—can add up quickly, so it’s important to account for all these expenses in your budget. Once the celebrations are over, many consumers find themselves facing high balances that are difficult to pay off while still keeping up with other expenses and bills.
Fortunately, there’s a way to break that cycle. Balance transfer credit cards can help you pay down post-holiday debt faster by lowering—or even temporarily eliminating—interest charges. However, balance transfers work best when you’re fully committed to paying off what you owe without adding more debt along the way. Our expert tips will help you understand these offers thoroughly and use them strategically to your financial advantage.
Your budget and debt snapshot
Before you start browsing the best balance transfer offers, take a moment to understand where you stand financially. A clear snapshot of your income, expenses, and debt will help you decide whether a balance transfer makes sense – and how much you can realistically pay off. Review your current spending habits to identify areas where you can cut discretionary spending and improve your overall financial situation.
Track your income and spending
Start by writing down how much money you bring in each month after taxes, then list your regular expenses – things like rent or mortgage payments, utilities, groceries, and transportation. Seeing these numbers in black and white can help you identify where your money is going and whether you have room to make bigger debt payments.
If you’re not sure where your money goes, try using a budgeting app or your bank’s spending tracker for a month or two. You may be surprised at how much small, everyday purchases can add up – especially after the holidays. Review your unnecessary expenses, such as streaming services, subscriptions, or dining out, and consider reducing or pausing them to help save more for your holiday spending.
List all debts you owe (including holiday spending)
Next, gather your most recent credit card statements and make a comprehensive list of every balance you owe. Be sure to include all your debts, even those spread across multiple cards, with special attention to any credit card debt incurred from holiday spending. Record the interest rate, minimum payment, and due date for each balance. Don’t forget to factor in any “buy now, pay later” (BNPL) balances or store credit cards you may have used for holiday gifts and other expenses.
Having this detailed overview will give you a clear picture of your total holiday debt and highlight which balances are costing you the most in interest. Typically, those high-interest credit card balances are the best candidates for balance transfers, helping you pay down holiday expenses more efficiently.
Determine how much you can pay monthly
Finally, decide how much you can realistically afford to put toward debt each month. Set a spending limit for yourself and consider ways to bring in extra income to help make your monthly payments. The goal with balance transfers is to pay off the entire balance before the promotional 0% APR period ends – usually within 12 to 21 months – so you don’t get hit with high interest again later.
If you can commit to a set monthly payment and avoid adding new charges, balance transfers can be a smart way to get ahead. But if your budget is already stretched thin, you may need to focus first on reducing expenses or increasing your income before taking on a new credit card.
Balance transfer tips that actually work
A balance transfer can be one of the smartest ways to tackle post-holiday debt – if you use it strategically. Here are some practical tips to help you make the most of balance transfers and actually come out ahead. By reallocating your funds and using balance transfers wisely, you can save money on interest and create some breathing room in your budget.
Choose a card with a long 0% APR period
Not all balance transfer credit cards are created equal. Different financial institutions offer varying promotional periods and interest rates, so it’s important to compare options before choosing a card. Some offer an introductory 0% APR for just six or 12 months, while others extend that window to 18 months or more. The longer the promotional period, the more time you’ll have to pay off your balance without paying any interest charges.
Before you apply, calculate how much you’ll need to pay each month to clear the debt before the offer expires. For example, if you transfer $3,000 to a card with a 15-month 0% APR, you’ll need to pay about $200 per month to pay it off in time.
➤ FREE TOOL:Balance transfer calculator
Avoid cards with high transfer fees
Balance transfer credit cards charge a transfer fee — typically 3% to 5% of the amount you move. While that might not sound like much, it adds up quickly. For instance, a 5% balance transfer fee on a $5,000 transfer adds $250 to the debt amount you need to pay off.
If you can find a balance transfer fee lower than 3%, that’s ideal. However, cards with a 3% balance transfer fee are more common with the best balance transfer offers.
Transfer only what you can repay on time
It can be tempting to move all your debt to a new card, but only transfer the amount you can realistically pay off before the 0% period ends. Once the introductory rate expires, your remaining balance will start accruing interest — often at the same high rate you were trying to escape.
Crunch the numbers to ensure your repayment plan fits comfortably within your monthly budget. For example, if you plan to transfer $1,500 in holiday debt, anticipate a 3% balance transfer fee—bringing your new debt balance to $1,545—and can afford to pay $150 per month, then selecting a balance transfer card offering 0% APR for at least 11 months would be a smart choice.
Keep the old card open if it has no fee
After completing a balance transfer, your first instinct might be to close your old credit card account. However, closing a card reduces your total available credit. This can increase your credit utilization ratio overnight, which means your credit score could take a hit.
If the old card doesn’t have an annual fee, consider keeping it open. Just store it somewhere safe and avoid using it for new purchases while you focus on paying off your transferred balance.
Stop using credit cards for new spending
A balance transfer only helps if you stop adding new debt. If you continue swiping your cards for everyday purchases, you’ll end up right back where you started.
Commit to paying cash or using a debit card for regular spending until your transferred balance is gone. This not only helps you stay on track but also builds better financial habits for the long run.
What to do if you can’t get a balance transfer card
Qualifying for a balance transfer credit card may not be as easy as it sounds, especially if your credit score took a hit during the holidays or you’re already carrying high balances. The good news? You can still pay off debt and regain control of your finances. It’s important to prioritize paying off high-interest debt, avoid late fees, and make sure not to pay late to prevent additional charges that can slow your progress.
Use the debt avalanche or debt snowball method
If you can’t take advantage of a 0% APR offer, focus on paying down debt the old-fashioned way. Two popular approaches are the debt avalanche and debt snowball methods.
With the debt avalanche method, you prioritize the debt with the highest interest rate first while making minimum payments on the rest. This approach saves you the most money in interest over time.
The debt snowball method, on the other hand, focuses on paying off your smallest debts first, giving you quick wins and motivation to keep going. Once those smallest debts are gone, you roll those payments into the next balance.
Look into personal loans with fixed rates
If your credit score isn’t quite high enough for a balance transfer card, a personal loan can be a smart alternative. Many lenders offer fixed-rate debt consolidation loans that let you combine multiple balances into a single monthly payment — often with a lower interest rate than credit cards charge.
A fixed-rate loan also provides predictability since your payments stay the same each month and your payoff date is set in stone. Just make sure to compare offers from banks, credit unions and online lenders to find the best rate and lowest fees.
Try a no-spend challenge for 30 days
If your budget is already stretched, cutting expenses – at least temporarily – can help you make progress faster. A 30-day no-spend challenge requires short-term sacrifice, but it can free up extra money for debt repayment.
How does this work? For one month, commit to paying only for essentials like groceries, gas and bills. Skip restaurant meals, impulse buys, and online shopping. You’ll be surprised how quickly small savings add up – and how much easier it is to put that money toward your balances.
By the end of the month, you might even find that you don’t miss some of those extra expenses, giving you more room in your budget to stay debt-free moving forward.
Plan ahead to avoid future holiday debt
Once you’ve made progress paying down this year’s balances, it’s time to start thinking about next year. Consider these debt-free holiday tips for the next holiday season and beyond.
Set a spending cap and stick to it
Before you start shopping, decide exactly how much you can afford to spend and make that your limit. Consider using last year’s spending as a reference point, but be realistic about your current budget. Once you have a number in mind, divide it into categories like gifts, travel, food, and decorations so you know where your money should go.
If you’re worried about overspending, try using a prepaid card or a separate holiday savings account. When the money’s gone, the shopping stops — no interest charges, no surprises.
➤ SEE MORE:Holiday budgeting tips: Why smart shoppers start planning now
Track purchases during holiday sales
It’s easy to lose track of spending when you’re snagging “limited-time” deals or shopping across multiple stores. Keep a running list of what you’ve bought, who it’s for, and how much you’ve spent so far. This helps prevent duplicate purchases and keeps you accountable to your budget.
If you prefer digital tools, use a spreadsheet or a budgeting app to monitor expenses in real time. Seeing your total grow can be the best reality check to stop impulse buys before they happen. If you do use credit for rewards or purchase protection, make sure you can pay off the balance in full when your statement arrives. Cash back rewards can also help you save money or pay down debt if used responsibly.
Use cash or debit instead of credit
Whenever possible, pay for holiday purchases with cash or a debit card instead of relying on credit. This simple habit keeps you from spending money you don’t have while eliminating the risk of facing another round of post-holiday bills.
If you do use credit for rewards or purchase protection, make sure you can pay off the balance in full when your statement arrives. Otherwise, the interest charges will outweigh any rewards you earn.
Bottom line
The holidays are meant to be joyful, not stressful – and certainly not a reason to start the new year paying off holiday debt. Whether you tackle your balances with a smart balance transfer, a personal loan, or an old-fashioned strategy like the debt snowball, the key is to take action and stay consistent. With discipline, many people can pay off holiday expenses in just a few months, and maintaining good credit health is important for future financial flexibility.
By tracking your spending, setting boundaries, and planning ahead, you can enjoy the season without financial regret. Start now, and next year’s celebrations can be merry, bright, and debt-free. Plan ahead so that when Christmas rolls around again, you can avoid new holiday debt.
