You’re not alone if you went into debt shopping for the holidays. Several American consumers plan to put some of their holiday spending on their credit cards to pay off later.

However, too much holiday credit card debt can harm your wallet and your credit rating. Having a large credit card balance can lead to higher payments, interest charges, and even a lower credit score.

When you’re experiencing a holiday debt hangover, it’s time to dig yourself out. The following tips will help you pay down holiday credit card debt in the New Year and improve your financial outlook.

1. Adjust Your Monthly Budget

Do you keep track of your income and expenses with a monthly budget? It’s time to reallocate some funds to your credit card bill and find some extra cash. By simply cutting out unnecessary spending such as dining out and shopping trips, you can use that money to pay more on your credit card if you have enough discretionary income.

It may be necessary to shift priorities more if your budget offers less wiggle room. You can either save a little less for a few months or reduce your grocery bill until your card is paid off. It is important to find a little extra money in your budget to put towards your credit card debt. In order to save money in the long run, it’s important to pay off your debt in order to avoid accruing interest.

If you are able to find a little extra money in your budget, continue doing that month after month until your credit card balance reaches $0.

2. Start a Side Hustle

An extra income from a side job for a few months will go a long way toward reducing your holiday debt. You can shovel snow, offer your services on the freelance market, drive for a ridesharing service, or sell unwanted items online. Your extra cash should go directly to your credit card account.

3. Open a Credit Card with a Balance Transfer Offer

Balance transfers are often offered at 0% introductory rates by credit card issuers to new customers. By moving all or part of your credit card debt to the new card, you can use the low interest rate to pay off your debt faster.

You pay the introductory interest rate on any balance transfers you make for the duration of the promotion. If you have a credit card with 0% APR on balance transfers for an entire year, you will not accrue interest on the transfer. Pay off the balance transfer during the promotional period to avoid additional interest charges.

4. Stop Using Your Credit Card

Adding to your holiday debt is going to make it hard for you to pay it off. Until you’ve managed to pay off your credit card balance, you can temporarily stop using it. You’ll lower your credit utilization ratio (which affects your credit score) and prevent your balance from spiraling out of control.

5. Use Unplanned Income to Pay Off Debt

Have you received a bonus at work? Did you receive a tax refund or some cash for your birthday? Rather than spending that unexpected income on something you want, use it to pay off your debt.

6. Plan for Next Holiday Season

You should start saving for the upcoming holiday season once you have paid off your debt. Your holiday purchases will be easier to make if you use cash instead of a credit card. Planning ahead and preventing debt is easier than digging yourself out after the fact.

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