1 in 3 Americans Who Racked Up Holiday Debt in 2022 Still Haven’t Paid It Off

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Are you still grappling with credit card debt from last year’s holidays? You’re not alone. Read on to see how you can pay it off. 

The holidays are a popular time to rack up credit card debt. And this season, you may be resigned to closing out December with a credit card balance that will carry into 2024.

But what if your 2023 holiday credit card balance is coming on top of an existing balance from last year’s holiday season? According to a recent survey by CouponFollow, 25% of Americans said last year’s holiday shopping led to credit card debt. And of consumers in that boat, 35% have yet to pay that debt off in full.

The problem, though, is that the longer you carry a balance on your credit cards, the more interest you rack up. Also, too large a credit card balance relative to your total spending limit could actually drag down your credit score. This holds true even if you manage to make your minimum payments each month.

If you’re still hanging onto debt from the 2022 holidays, it’s imperative that you shake it as quickly as you can. And with these two tactics, you may find that you’re able to become debt-free well before the end of 2024.

1. Pay off your debt more efficiently

The reason credit card debt can be so tricky to pay off is that for each day you continue to carry a balance, more interest gets tacked onto your total. So if you can get out of accruing credit card interest for a period, that might help you get ahead of your debt.

To that end, look at doing a balance transfer to a 0% introductory APR credit card. Now, you’ll only get that 0% APR for a limited period. But it might last for a year or longer, which gives you an opportunity to chip away at your debt without interest continuing to add up.

2. Use the gig economy to free up money to put toward your balance

The advice above really only works if you’re able to capitalize on that 0% introductory APR period by generating extra cash to pay off your debt. You may be able to cut back on spending significantly enough to make good progress in paying off your balance. But for some people, it’s not feasible to cut back on spending to that large a degree.

So instead, look to the gig economy. If you’re willing to hustle at a second job for a good part of 2024, you may be able to earn enough money to knock out your credit card balance in full and save up for the 2024 holidays. That way, you can approach the next holiday season without debt, and you’ll be more likely to avoid debt you carry into 2025.

As far as finding the ideal side gig goes, that’s going to hinge on your schedule and skills. If you’re great at something like web design, you can try getting hired to create or update websites for different businesses. That’s something you can likely do from the comfort of home.

Or, you may decide to sign up to drive for a service like Uber and see how it goes. The benefit there is that you can haul passengers around when it works for you. If there’s a month when life is just too busy, you scale back.

It’s one thing to carry credit card debt from this year’s holiday season into 2024. But if you’re looking at carrying a balance from last year’s holidays into the new year, then consider these tips for shedding that debt once and for all.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

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