How to Dig Out of Holiday Debt: Expert Tips for 2026

Facing Holiday Debt

• ⚠️ After the holiday season, many find their wallets empty due to increased spending.
• 💡 The new year presents an opportunity to re-evaluate finances and set money goals.
• 📊 Americans added an estimated $50 billion to credit card balances in 2025, with the average person starting 2026 carrying over $6,500 in debt.

Prioritizing Debt Repayment

• 🎯 The number one resolution should be chipping away at debt balances.
• ✅ Make payments on time and ideally in full to avoid damaging your credit score.
• 💳 Utilize autopay to ensure payments are not missed, as this can negatively impact credit.

Strategies for Debt Reduction

• ⚡ To build better credit, aim to keep credit card usage under 30% of available credit, ideally under 10%.
• 💡 Two popular methods for debt repayment are the snowball method (paying smallest debts first for quick wins) and the avalanche approach (paying off highest interest debts first to save money).
• 📈 Even a small increase in monthly payments, like $50, can significantly cut down repayment time and interest paid.

Balance Transfer Offers

• ❓ Balance transfer offers with 0% interest can be appealing for consolidating debt.
• 🔑 To qualify, excellent credit is typically required.
• ⚠️ Be aware of the pros (faster payoff, improved credit score, one payment) and cons (introductory rates expire, transfer fees, risk of accumulating more debt if not disciplined).
• 💳 If using a balance transfer, avoid using the old cards and focus solely on paying down the transferred balance to prevent falling back into debt.