5 important credit card debt relief moves to make this January

For many American credit card holders, record-high interest rates are turning routine charges into compounding debt. The holiday season only made things worse — as spending on gifts, travel and celebrations pushed many card balances even higher.

But there's hope if you're drowning in credit card debt this January. We spoke with finance professionals who shared their most powerful strategies for breaking free. Whether you're dealing with one maxed-out card or juggling several balances, their advice can help you regain control of your finances.

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5 important credit card debt relief moves to make this January

Before diving into specific debt relief strategies, you need a strong foundation. Bryan Meizinger, executive vice president and chief credit officer at FAIRWINDS Credit Union, suggests building an emergency fund of at least $1,000. If you get hit with an unforeseen expense, robust emergency savings can help you avoid adding more debt (and compounding interest). Once you have that safety net, explore these five moves to tackle credit card debt:

Explore balance transfer card options

Balance transfer cards can offer relief from high-interest credit card debt if you have good credit. Austin Kilgore, an analyst with the Achieve Center for Consumer Insights, explains that these cards provide a window to pay off debt with a low or zero interest rate. Typically, promotional periods last six to 21 months.

Having a clear repayment plan goes a long way here. You'll need to be capable of paying off the balance before the promotional period ends or you'll face steep interest rates on any remaining debt. Kilgore also cautions against using either the old or new card for additional purchases while paying off the transferred balance.

Learn more about your credit card debt relief options today.

Consider debt consolidation through a personal loan

Don't qualify for a balance transfer card? Look into debt consolidation. This lets you combine multiple high-interest debts into a single one, allowing for one monthly payment typically made at a lower rate than what you're paying on your credit card(s).

Consolidating debt through a personal loan is straightforward. You use the loan proceeds to pay off your credit card balances, then focus on repaying just one loan. "A debt consolidation loan has the advantage of strict payment schedules and timeframes," Kilgore points out. This structure helps you eliminate the debt within a set window.

Keep in mind the interest rate you qualify for depends on your credit score and varies by lender. Shop around and compare rates against what you're currently paying on your credit cards to ensure consolidation makes sense.

Evaluate debt management plans

"If your debt is getting out of control and you're missing payments due to lack of income, it's time to talk to a credit counselor," emphasizes David Campbell Lester, a wealth coach. He recommends seeking debt help from the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).

These credit counseling firms offer debt management programs to reduce your credit card interest rates. However, Kilgore notes that while these programs provide structured repayment plans, the rate reductions may be modest and often involve multi-year commitments. Still, having professional guidance and support can be helpful.

Negotiate directly with credit card companies

Sometimes the simplest solution is to pick up the phone and talk to your credit card company. Lester points out that if you're a good customer, you could qualify for a decrease in interest rates. You'll have the most leverage if you've maintained a solid payment history or have other accounts with the same institution.

Your position for negotiating is even stronger if you mention that you're considering a balance transfer or consolidation loan. According to Lester, this approach can motivate card issuers to offer more competitive rates.

Tackle small balances first

Juggling multiple credit card balances? Don't get overwhelmed trying to tackle the biggest one first. Meizinger recommends starting with your smallest debt and working your way up — a strategy known as the debt snowball method. This approach gives you quick wins so you stay motivated to keep going until all debt is paid off. Each time you eliminate a small debt, you can redirect that payment amount toward the next balance on your list.

The bottom line

Your holiday bills don't have to become a year-round burden.

Start by building a basic emergency fund. $1,000 may not seem like much, but it can prevent new debt from piling up. Then, research your options and speak with some top debt relief companies to compare their programs.

Lester warns against taking the first consolidation loan that comes your way. Read the fine print about fees and rate adjustments carefully, as hidden costs can erase any savings from debt consolidation.