Holiday spending can create unnecessary stress—especially without a holiday budget. It’s common for people to splurge during the holidays, which can sometimes lead to extra debt. Creating a plan to reduce credit card balances and repay holiday credit card debt will help make the coming year more enjoyable.

Here are nine tips to reduce leftover balances from holiday spending.

1. Make more than the minimum payment.

Making minimum payments will increase the amount of interest you pay over time. By paying as much as you can afford above the minimum balance, you can reduce the cost of your debt by reducing the amount of interest accrued on the debt.

Consider calculating how much purchases will cost if you only make the minimum payment each month. Understanding the cost might convince you to put more toward the monthly credit card balance. Try using our calculator:

2. Use the snowball or avalanche method.

The snowball method involves paying debts in order from smallest to largest regardless of interest rate. Using this method you will save less money than prioritizing payments to the highest-interest debt. Still, the snowball method motivates people by prioritizing reducing the number of payments. If you prefer to reduce the cost of credit, you might consider the avalanche method, which prioritizes paying off debts with higher interest rates. Compare the snowball and the avalanche method to see what’s best for you.

3. Consolidate debt.

Combining all debts into a single loan can simplify repayment. It may also provide a lower monthly payment and lower interest rate. Before working with a debt consolidation company, speak with a financial counselor for free to explore your options.

In addition, homeowners might also consider a home equity line of credit (HELOC). HELOCs are loans secured by home equity and tend to provide lower interest rates than other types of credit.

4. Transfer your balance.

A balance transfer is a common promotional offer from lenders to incentivize borrowers to move their debt from one lender to another. A balance transfer is an excellent alternative to a more formal debt consolidation process. By transferring your balance from one credit card to another, you could take advantage of a promotional interest rate and possibly reduce your standard interest rate. Be careful about opening too many credit cards to repeatedly move your balance as each new application is a hard pull on your credit.

5. Apply a tax refund or a bonus to your balance.

If you get a refund during tax season, apply it to your debt. In the short run, you can reduce how much you’re paying in interest and potentially eliminate some monthly payments. Additionally, if you pay down a credit card, you’ll be able to use the new available balance if you’re hit with an unexpected expense.

Like your tax refund, a bonus can be an influx of cash that provides an opportunity to pay off holiday debt. It’s often tempting to use unexpected or unbudgeted cash on new purchases, vacations, etc. By resisting the urge to spend, you can make progress on reducing debt.

6. Negotiate with creditors.

If debt becomes unmanageable, consider contacting your lenders to discuss the situation. Some lenders will help negotiate a smaller monthly payment, a due date shift, or a reduced interest rate. Ultimately, lenders prefer to work with borrowers to repay debts directly rather than selling the debt to a collection agency. It’s in each borrower’s best interest to talk with lenders directly when facing debt challenges.

7. Improve your cash flow.

Paying off debt may require another look at your budget. If your current budget doesn’t allow you to effectively manage existing debt, then something needs to change. You may be able to cut back on discretionary spending, such as eating out or entertainment. If you’re out of options to cut back on spending, you may need to find another source of income through a job change or side hustle. If you need new and improved skills, many practical alternatives to college can open up new earning potential.

8. Budget for holiday spending.

Sticking to a budget is challenging. The holidays bring excitement, and people often get carried away with spending, as 70% of Americans go over their holiday budget. You may have had no problem sticking to a budget from January to October. Yet, when November and December arrive, things change. Setting a holiday budget and sticking to it is critical.

Saving ahead of time can help you meet your financial needs without increasing debt. Consider having a pre-determined amount automatically transferred from your checking account to your savings account each month to stay consistent. Also, bundle your services to take advantage of perks and benefits, including higher interest on savings accounts.

9. Speak with a financial counselor.

Sometimes it’s difficult to determine how to start paying off debt. Speaking with a financial counselor can provide many benefits, including a better understanding of your financial situation, the development of a budget, the setting of financial goals, assistance with debt management, improvement of your credit score, and planning for the future.

A financial counselor can help you make informed financial decisions and improve your financial well-being.

Pay off holiday debt and plan for next year.

Holiday spending can lead to extra debt and create unnecessary stress. However, by creating a plan to pay off holiday credit card debt, you can better enjoy the year to come and improve your financial stability.

Do you want to learn more? Consider exploring free educational resources from Enrich or downloading our free credit eBook.