5 moves to make if you've racked up credit card debt this holiday season

Holiday credit card bills hit differently for many this year. With record-high credit card interest rates and compounding interest charges, holiday shopping expenses often snowball into overwhelming balances. When you account for gifts, gatherings and family travel, December's routine credit card use can lead to a costly financial hangover.

The good news is you can get relief from that kind of debt before it spirals. We spoke with financial advisors and credit counseling experts about the most effective ways to dissolve seasonal debt. Here's what they want you to know.

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5 moves to make if you've racked up credit card debt this holiday season

Regina McCann Hess, financial advisor and president of Forge Wealth Management, advises getting to the root of the problem before making any complex moves.

You can figure out how you racked up debt by looking at your spending and asking yourself the following questions:

• Do you have a budget? (If not, it's time to create one)
• What have you been buying?
• Is your spending within your budget?

Taking stock of your credit is also critical. 

"We always recommend an updated budget and review credit reports to get an accurate look at the situation," says Martin Lynch, president of the Financial Counseling Association of America (FCAA). He mentions holistic credit counseling produces better outcomes than any other approach for his clients.

Once you understand your spending patterns and have stopped adding new debt, consider these moves to squash your holiday bills:

1. Consider a balance transfer

"Opening a credit card with 0% APR can give you temporary relief from high-interest [holiday] debt," notes Tripp Bennett, a financial advisor at Northwestern Mutual. When you take the balance transfer route, you only make payments toward reducing the principal amount (instead of paying interest).

But Lynch warns this strategy works best when you can "aggressively pay down balances during the 0% rate [period]." Balance transfer fees usually range from 3% to 5%, and the related card rates increase significantly after the promotional period ends.

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2. Explore debt consolidation loans

Debt consolidation simplifies holiday credit card payments while lowering your interest rate (if you qualify). Bennett explains this involves taking out a loan to combine multiple high-interest debts into a single pre-set monthly payment with a lower interest rate. It streamlines your payments, helping you become debt-free sooner.

For longer-term debt relief, consolidation can provide substantial savings. Credit card counseling agencies' debt management plans can last as long as 72 months, according to Lynch. This lets people pay off their balances at much lower interest rates than what credit cards typically charge.

3. Adopt the debt snowball or avalanche method

With the debt snowball method, you tackle your smallest balances first. Hess is an advocate for this approach, noting that "when you [do this], you [get] a few wins early on and build your confidence." 

The alternative is the debt avalanche method, which targets debts with the highest interest first. Either strategy can work well, but research both to choose an approach that fits your lifestyle.

4. Negotiate a lower interest rate with creditors

"Call your creditors [to] request a lower interest rate — it can only help you," says Bennett. 

When you make the call to negotiate, be prepared with the right information. He suggests emphasizing your history of on-time payments or mentioning competitive offers from other credit card companies as leverage. The worst your creditor can say is no. But you might be surprised by how much you could save with a single phone call.

5. Look into a home equity line of credit (HELOC)

Hess points out that a HELOC could be promising for handling holiday debt if you own a home. It can offer a lower interest rate than what your creditor is charging you — and flexibility with repayment.

According to Hess, you can create a payment plan that extends beyond a year if needed. This gives you breathing room while reducing interest charges. But consider this option carefully, as it uses your home as collateral.

The bottom line

Getting rid of credit card debt requires acting now and having a clear long-term plan. To help you stay on track, Bennett recommends identifying your triggers for overspending and setting up automatic payments to guarantee consistency. And if managing debt is causing daily stress, debt assistance options can offer some structure and relief.

Start by researching debt relief companies and comparing their services. But don't stop there — create a realistic budget that prevents future debt while building an emergency fund. Whether you tackle the debt alone or seek professional help, the key is taking control today before holiday bills become a year-round burden.