#FreshStart: Digging Out of Holiday Debt

The holidays may be behind us, but credit card bills may follow you for months to come.

Many Americans admit they overspend during the holidays on gifts or travel, so we talked to the experts at Bankrate for the best ways to start chipping away at that lingering holiday debt. 

"Many people are focused on reducing their weight at the beginning of the year but they should really also be focused on reducing the weight of the debt they may have indeed accumulated over the holidays," Mark Hamrick with Bankrate.com said.

If you  have more than one credit card carrying a balance, Bankrate recommends paying off the one with the highest rate.

"It may not be the one with the highest balance on it, but look at the one that may be charging 18, 20, 22, 24 or 25 percent," Hamrick siad.

Next, prioritize those payments by making a plan for which cards you'll pay off each month, making more than the minimum payment when you can.

Also, consider transferring your balance. Sites like Bankrate.com let you shop around for a new credit card to consolidate your balance and simplify your payments all in one place.

"There may be a 3 percent transfer fee, but you can really save a lot of money going from say 15 percent or more than you’re paying right now to say 0 percent. That’s a big savings," Hamrick said.

If this option sounds enticing, read the fine print on the card first. The Consumer Financial Protection Bureau says sometimes, zero percent can grow into real interest rate after a certain promotional period.

Lastly, don't let the cycle repeat itself! Get rid of bad habits now so you don't wind up in this situation again next year. 

"You may want to be more diligent, try to spend less or be a better consumer and be more strategic about what you’re buying," Hamrick said.

Contact Us