What to Do When You Can’t Pay Holiday Debt
More Americans borrowed money to pay for holiday purchases and now the bill is due. Balance transfer cards offer a reprieve.

The holidays are behind us; it’s time to take down the tree and stash the decorations, if you haven’t already. One unwelcome leftover that’s harder to put away can be holiday debt. Say you were feeling generous and bought too much; now the debt threatens to consume you. What are your options?
As you work at paying down holiday debt, make sure the interest on your credit cards doesn’t slow your progress. You might be tempted to accept a tantalizing offer from a credit card company for zero interest for a transferred balance. Is this balance transfer card a good idea? It could be, as long as you use it wisely.
More Americans Borrowed This Season
According to a survey by Lending Tree, 36% of Americans took on debt at an average of $1,249 this past holiday season. Although more people borrowed money, compared to 2020, the average amount of spending was 10% lower. Also, this was the first time the amount borrowed fell since the survey began in 2015.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, the vast majority — 82% — of people with holiday debt say they won’t get it paid within a month.
Those most likely to take on holiday debt — not surprisingly — were parents with children younger than 18 (Santa obligations??). About 54% of those parents, as well as 50% of millennials took on debt over the holiday season. Each group averaged $1,462 in debt.
Buy now, pay later financing was a popular option this year, with 40% of Americans using it, compared to 37% in 2020. Again, parents with younger children were the top users of this option at 64%, followed by people who earn six figures at 61%, and millennials at 60%.
Of course, 62% of people with holiday debt used credit cards. Another 23% used personal loans.
Balance Transfer Cards Should be Used Sparingly
With more than a third of borrowers paying higher than average credit card interest rates, many are considering balance transfer cards. These are credit cards that entice new customers by offering zero interest on balance transfers for varying periods of time.
This can be an option for people with good credit who are attractive customers for credit card companies.
Christopher J. Marquette, a business professor at Millikin University, said the cards are issued by credit companies looking to expand their customer base. The offer is usually for zero interest on transferred balances for between six and 18 months, he said. Typically, there’s a balance transfer fee up front, which can be 3 to 5 percent or a minimum dollar amount for a smaller balance transfer.
Marquette said these cards can be a good option, as long as they’re used sparingly. The main danger, he said, is relying on them too much, continuing to take out new cards to roll balances over in an attempt to create a continuous zero-interest loan.
“Every time you open a credit account, it dings your credit score,” Marquette said. If you do it frequently enough, it can hurt your credit to the point where you will be paying higher interest rates overall and won’t get zero-interest offers at all.
Taking the bait once or twice won’t hurt, Marquette said, but beyond that, people should tread carefully. Consider a zero-interest transfer a bit of breathing room, get a handle on your budget, and work to pay off your entire balance before the interest kicks in.
Balance Transfer Card Offers
Examples of cards with 0% balance transfer offers include:
- Wells Fargo Reflect Card which offers a 0% introductory rate for qualifying balance transfers and purchases for 18 months, which can be extended by three months with on-time minimum payments. After that, interest rates are between 13% and 25%.
- Bank of America has a card with 0% interest for 15 billing cycles for balance transfers and purchases within the first 60 days of opening the account. After that, interest rates vary between 14% and 24%. The card also has cash back of 1% to 3%, depending on the category of purchase and a $200 online cash rewards bonus offer.
- Chase Freedom Flex has 0% interest for 15 months for balance transfers and purchases. After that, interest rates vary between 15% and 24%. The card also offers 1% to 5% back on up to $1,500 combined purchases in different categories.
- Citi Diamond Preferred Card has 0% interest for 21 months on balance transfers and 12 months on purchases. After that, the interest rate will vary between 14% and 24%.
- US Bank Visa Platinum Card has 0% interest on balance transfers for 20 billing cycles. After that, interest varies between 14.5% and 24.5%.
Elaine Silvestrini has had an extensive career as a newspaper and online journalist, primarily covering legal issues at the Tampa Tribune and the Asbury Park Press in New Jersey. In more recent years, she's written for several marketing, legal and financial websites, including Annuity.org and LegalExaminer.com, and the newsletters Auto Insurance Report and Property Insurance Report.
-
-
IRS is Targeting Promoters of Abusive Tax Schemes Kiplinger Tax Letter
Tax Letter Tax schemes range from basic tax dodges to highly complex transactions.
By Joy Taylor • Published
-
How to Save on Prescription Medication
How you can save money on prescription medication amidst rising prices.
By Erin Bendig • Published
-
The 50-30-20 Budget Rule is a Simple Way to Save Money
Saving Using the 50 30 20 budget rule is an easy way to save as it keeps budgeting simple while helping you prioritize saving and pay off debt.
By Erin Bendig • Published
-
Best Cash Back Credit Cards June 2023
Smart Buying Looking for the credit card that pays the most cash back? These lenders may pay hundreds of dollars, with minimum hassle.
By Lisa Gerstner • Last updated
-
I-Bond Rate Is 4.30% for Next Six Months
Investing for Income Bonds issued May 1 to October 31 will have a rate of 4.30%.
By David Muhlbaum • Last updated
-
What Are I-Bonds?
savings bonds Inflation has made Series I savings bonds enormously popular with risk-averse investors. So how do they work?
By Lisa Gerstner • Last updated
-
Your Guide to Open Enrollment 2023
Employee Benefits Health care costs continue to climb, but subsidies will make some plans more affordable.
By Rivan V. Stinson • Published
-
Watch Out for Flood-Damaged Cars from Hurricane Ian
Buying & Leasing a Car In the wake of Hurricane Ian, more flood-damaged cars may hit the market. Car prices may rise further because of increased demand as well.
By Bob Niedt • Last updated
-
What You Need to Know About Life Insurance Settlements
life insurance If your life insurance payments don’t seem worth it anymore, consider these options for keeping the value.
By David Rodeck • Published
-
Best Travel Rewards Credit Cards June 2023
credit cards Business road warriors and leisure travelers can use travel rewards credit cards to turn miles logged into other things — including more travel.
By Lisa Gerstner • Last updated