How to hack holiday debt

Jeanine Skowronski

Published November 28, 2017|3 min read

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Updated Dec. 12, 2018: We know, we know: The holidays are bananas. Money resolutions are for the new year. But stop paying attention to your bank account and you’re in for a rough January. Fortunately, there are tricks to curb a burgeoning balance. Here’s how to hack your holiday debt.

1. Tap your credit card rewards

You can redeem cash back as a statement credit to lower an already-big balance. Or you can use points (and sometimes miles) to purchase gifts or discount gift cards in an issuer’s rewards portal. Bonus hack: Amazon lets you pay for purchases with points from select Chase, Citi and American Express credit cards.

2. Four words: balance transfer credit card

Buy yourself some time to pay off a high-interest balance by transferring it to a card offering low-to-no interest for six to 21 months. You’ll probably face a fee — typically 3% to 5% of the balance — but, if you owe big, you'll come out ahead on getting rid of those steep interest charges.

Plus, if your credit’s good, you could qualify for a card that waives the balance transfer fee. One warning: Avoid using the extra credit. Some balance transfer credit cards don’t offer low-to-no interest on new purchases, and, even if they do, you’re just digging a deeper hole.

3. Prioritize payments

If you’re simply stuck with a bunch of balances on your plastic, put as much as you can toward the one with the highest interest rate, while making minimums on the others. That’ll save you in the long run on interest. We’ve got more steps for paying off debt here.

4. Switch to cash

There are countless studies suggesting an all-cash-diet curbs spending. Their basic gist: Paper money is tangible so it’s harder to part with — and worth switching to if your card balances climb too high. Think about it: Are you really going to buy your Secret Santa a $180 robot if it means breaking two Benjamins? Yeah, we don’t think so either.

5. Get life insurance

OK, life insurance won’t help you hack holiday debt, but it will keep your co-signers from shouldering that burden if you happen to die. (Sorry to be such a Scrooge.) Coverage is more affordable than you think. A term life policy can cost around $30 a month. Translation: Its premium won’t throw a monkey wrench into your debt payoff plans. Plus, TBH, if you have loved ones depending on your income, you need coverage anyway. Policygenius can help you quickly compare life insurance quotes here.

6. Shop smarter

There are plenty of ways to get better at holiday shopping. We’ve got a full crib sheet here.

7. Return stuff

Yes, that means some of the presents you already bought. Or all of them, if you’re suddenly inclined to go giftless. But here’s the thing: You can return stuff you get, too. And, with a gift receipt, you can turn dud gifts into cash. Another way to get more money for your balances? Tap resale sites, like GiftCardGranny, which offer up to 92% cash back on unwanted gift cards.

8. Get creative

Save wherever you can. Here are 50 things to make holidays more affordable.

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