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5 Steps to Crush Your Holiday Debt Quickly

Andrea Woroch  |  December 29, 2021

Spend too much this holiday season? We have a plan — the kind that can set you up for success in 2022, even if you went a little overboard.

With so much excitement (and, yes, anxiety) surrounding the holidays, it’s easy for us to overspend without realizing it… or sometimes we fully realize it, but we spend more than we should anyway, because we love our family and friends so much. And this seemed especially true this year for those of us who wanted to make up for missing time when we weren’t able to gather during 2020. 

According to the recent Consumer Spend Report from Affirm, 48% of Americans planned to spend more money this year because they weren’t able to celebrate the holidays normally in 2020. 

And while there’s nothing wrong with wanting to make the holidays special for your loved ones, it’s important to tackle any debt you took on quickly — this will help you improve your financial situation ASAP, and spend less on interest in the long run. So even though you may be hesitant to open those credit card bills as soon as they arrive in your inbox, we beg you: get to clicking. Because the sooner you can face the damage done on your holiday shopping sprees, the sooner you can make a plan to overcome it.

Here’s a look at 5 steps you can take in early 2022 to crush your holiday debt quickly.

Assess the Damage

In the rush and excitement of gift shopping, you may have failed to track purchases and have no idea how much you actually spent. While there may be some hesitation to open your credit card bill, facing the damage that’s been done is the first step to overcoming your debt.

Spend time reviewing each credit card bill, noting the balance and interest rate for each. Then, come up with a plan for tackling this debt based on how much you can realistically afford to pay each month. (Some people find it more motivating to pay down smaller balances first to capture quick wins and build momentum, but there’s no wrong or right way to do it!) A free app like the Debt Payoff Planner can help you track debt repayments to help you stay motivated to meet your goal.

Finesse your monthly bills

If you’re trying to come up with extra money to put toward your credit card payments, look no further than your own monthly bills. Start by reviewing your monthly expenses to figure out what you can cut back on while you try to pay down your debt. This can include simple things like washing your own car or grooming your pet yourself, for example. While you’re at it, review other bills for useless spending — are you paying for more data than you typically need on your wireless plan, or paying for a subscription or membership you aren’t using? (We bet you can find a few to cancel!) Switching to a lower-tiered plan or canceling these services are easy ways to free up extra cash.

You may also be able to save on your various insurance policies just by doing a bit of research. According to the 2017 Driving in America Report, more than 1 in 3 Americans who hadn’t compared auto insurance costs or checked the price of their policy missed out on over $416 a year in potential savings. A quick search on an insurance comparison site like can help you find better and cheaper rates so your money can be used more wisely, like paying down your holiday debt.

Transfer your balance

Opening a new credit card when you’re trying to pay down another one may seem counterintuitive, but new cardmember promotions can help you offset the cost of interest so you can pay down your balance faster. Look for zero-percent balance transfer cards that will let you transfer your balance and take advantage of the interest-free payments for up to 18 months. 

This strategy gives you time to pay off your balance without racking up interest, allowing you to save money that you’d ordinarily be paying in interest, and ultimately pay off your principal chunk of debt faster. Compare balance transfer credit cards at sites like to find one that fits your needs.

Increase cash flow 

There’s only so much money you can save by negotiating bills and cutting expenses — eventually your savings will bottom out, leaving you with little wiggle room in your budget to meet your lofty debt pay-off goals. This can be a sinking feeling — when you’ve done all you can, but there’s still so much that needs to be done. 

Although asking for a raise or finding a better paying job could solve this problem faster, these options may not be feasible at the moment. But that doesn’t mean you’re out of luck as there are other options for boosting your cash flow, from side hustles to selling unwanted items.

Depending on your interests and availability, there are a variety of side hustles you can do in your spare time from home to earn some extra cash. For instance, you can sign up as a virtual tutor through, or you could look after a neighbor (or a stranger’s) pet. (You can make up to $1,000 month via, for example.) Meanwhile, the New Year is a good time to declutter your home and purge unwanted items, selling whatever you can to make some cash to pay off your cards. Sign up at resale sites like to sell everything from gently used clothing to sporting goods to electronics. 

Break your impulse-spending habit

When’s the last time you successfully ran the “impulse buy gauntlet” at T.J. Maxx, Old Navy or Marshalls? You know, that ever-enticing maze of pocket-sized, yet-still-expensive items that you have to wander through on your way to the cashier to pay for the thing that you actually came into the store to buy? (And by “successfully ran” we mean “didn’t spend $$”). If it’s been a while, you’re not alone — but it’s time to kick that habit to the curb in 2022. According to a recent survey from Slickdeals, Americans are wasting $183 a month on impulse purchases alone. And while those $5 trinkets here and there might not seem like a big deal, they add up quickly, and can derail your debt-payoff goals with that same lightning-fast speed. 

To avoid buying on impulse, identify your spending triggers. For example, maybe you’re prone to making emotional purchases, or buying out of fear that you will miss out on a sale. Sometimes even the ease of making a purchase online with a single click of the mouse is enough to send you on a spending spree. Once you figure out what you need to fix, figure out how you can avoid these situations. For instance, find a free activity that will help you let off steam, rather than shopping. Also, unsubscribe from retailer newsletters and turn off sale notifications in shopping apps so you can better dodge your spending temptations. 

For all the items you need to buy like groceries and cleaning supplies, think about how you can stretch your dollars further. Always compare prices and use a cash back shopping site like to earn some money back for those daily necessities. Just make sure that the extra money you get back is put towards padding your debt payments, and you’ll be on the road to freedom in no time. You got this.


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