3 Strategies for Paying Off Holiday Credit Card Debt

It is a whole lot easier to get into debt than pay it off, but these tips can help.

Don Milne Dec 30, 2019

Christmas may be over, but for most people there is still one last Christmas-related event: Paying off Christmas bills. It is a sobering reminder that it takes funds to pay for Christmas fun. Those who get into holiday credit card debt usually take about five to six months to pay it off, meaning that Christmas costs even more thanks to interest charges.

The average American household spends about $700 on Christmas. Unfortunately, the average household that carries credit card debt pays almost twice this much on interest each year. So, if these households were able to get rid of their credit card debt, they could pay for a real nice Christmas with the interest they saved.

It is a whole lot easier to get into debt than pay it off. Nevertheless, many, many families are able to adopt new habits that allow them to attack debt. Month by month they whittle down their debt and if they keep up the pace, they end up joining those Americans who enjoy the benefits of living with no credit card debt.

Here are some strategies to help reduce your debt.

Debt reduction strategy #1: Create a payoff plan

The best way to start tackling your debt is by figuring out how much you can afford to pay each month to reduce the balance owed.

Zions Bank’s Credit Card Payoff Calculator can help you create realistic repayment goals. Once you determine how much you can afford to pay each month, set up an automatic monthly payment.

And while the temptation to pay only the minimum monthly payment can be great, you should try to pay more. Banks and credit card companies usually calculate the monthly minimum payment due as a percentage of your outstanding balance. The percentage is usually more than the interest rate they are charging on your balance, but low enough to make the minimum payment amount seem attractive.

Debt reduction strategy #2: Consider a credit card balance transfer

Credit card balance transfers — paying off one credit card with another — come with several caveats that should give consumers pause before jumping in. Under the right circumstances, however, moving credit card debt from a higher-interest to lower-interest environment can be a smart way to diminish debt.

A balance transfer may make financial sense for you if some or all of the following conditions apply:

  • You carry debt on a high-interest-rate credit card
  • You want to consolidate debt
  • You have the discipline to pay off the debt
  • You have good credit
  • You are willing to read the fine print

Debt reduction strategy #3: Pay your credit card bill on time

The Credit Card Act of 2009 capped late payment charges at $25, but they can add up if you frequently pay late. If you’re worried about late payment fees, consider the following strategies to help avoid such charges:

  • Set up automatic payments
  • Change the payment due date
  • Sign up for email and text reminders
  • Keep spending in check

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Once you’ve conquered your credit card debt, start thinking about next year. Instead of paying extra by paying for Christmas six months later, how about paying less by paying for Christmas six months early — or even 12 months early?

It can be tough on the budget to pay for all the holiday related expenses from one or two December paychecks. It is a whole lot easier to pay for Christmas from a whole year of paychecks.

Consider these three helpful holiday saving strategies.

Holiday saving strategy #1: Set up an automatic transfer

Banks are a great resource for you to build up your next Christmas fund. It is easy to set up an automatic transfer to your savings account that will be ready to use next Christmas.

Holiday saving strategy #2: Enroll in OnCard

You can also transfer your Christmas money each pay period to a Zions Bank OnCard. This has the added benefit that it lets you shop for the best Christmas deals all year around. Your OnCard works just like your debit card, but the balance is separate from your checking account so you can designate it exclusively for Christmas spending.

Holiday saving strategy #3: Bank your “extra” paychecks

For people who get paid every two weeks, that means that for 10 months of the year you have to live on two paychecks, while for two months of the year, you get an “extra” paycheck. These “extra” paychecks are a great way to pay off your past debt, but if you are debt-free, it can be a fast way to save up the money you need for next Christmas.

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Zions Bank offers a variety of resources that can help with your holiday saving strategy. Enroll in OnCard, open a checking account or savings account, or visit a Zions Bank branch near you to speak with a banker.

Don Milne is a financial literacy contributor to

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