One of the fastest ways to pay off holiday debt is to lower your interest rates, use a proven payoff method like the Avalanche or Snowball, and make extra payments whenever possible. These steps help reduce interest, speed up your payoff timeline, and eliminate holiday debt faster.
How Many Americans Went into Holiday Debt in 2025?
According to the AICPA, 47% of Americans who plan to spend on holiday gifts, travel, or both expect to go into debt during the 2025 holiday season.[1]
And credit cards are the main driver.
Here’s what the report reveals:
- 79% of those who plan to spend on holiday gifts/travel will use a credit card for purchases
- 52% of credit card users don’t expect to pay off their holiday debt in full when the bill arrives
- 17% will need over six months to pay off the holiday debt [1]
In other words, nearly half the country is already bracing for holiday debt – and a big portion will be carrying that balance well into the following year.
This is exactly why choosing the right payoff strategy now can save you time, money, and stress.
Which Debt Payoff Strategy Works Best after the Holidays?
The best payoff strategy depends on what motivates you more: Saving the most money or seeing the fastest wins.
Holiday debt is emotional and often spread across multiple cards, so choosing the right method can help you stay committed and pay everything off faster.
Here’s the quick breakdown:
Avalanche Method: Best If You Want to Save the Most Money
With the Avalanche method, you pay off the debt with the highest interest rate first, while making minimums on everything else.
This strategy reduces how much you spend on interest overall, which means you can get out of debt faster and pay less doing it.
Use this if:
- You want the mathematically fastest and cheapest payoff
- High interest rates are eating up your payments
- You don’t mind waiting a bit for your first “win”
Snowball Method: Best If You Need Quick Motivation
With the Snowball method, you start with the smallest balance first, regardless of interest rate. Every time you knock out a balance, you roll its payment into the next debt.
Use this if:
- You stay motivated by progress
- You want quick psychological wins
- You’re overwhelmed by multiple balances
This method builds momentum and is perfect for the “holiday debt hangover” when motivation may be low.
Snowflake Method: Best for Squeezing Every Extra Dollar
The Snowflake method uses micro-payments throughout the month, sending in money whenever you have it – $10 from a refund, $25 from selling something, or extra cash from a side gig.
Use this if:
- You want to reduce interest daily
- You get irregular income
- You prefer flexible, small steps that add up fast
This approach pairs beautifully with either Avalanche or Snowball to accelerate your results.
Strategy 1: Look for Lower Interest Rates
High interest is the one of the top reasons holiday debt lingers longer than tinsel in a vacuum cleaner.
Lowering that interest is one of the fastest ways to get out of debt quickly.
Here’s how to slash your rates:
Balance Transfer Credit Cards
See if you can transfer high-interest debt to a 0% interest card. Doing this means…
- Your whole payment goes toward the balance
- You get breathing room to pay it down faster
- You may save hundreds (or thousands) in interest
Just make sure you check:
- Transfer fees
- Promo period length
- Post-promo APR
Personal Loans
A personal loan may offer a much lower interest rate than credit cards, turning multiple debts into one structured payment.
If you go this route, just make sure you don’t rack up more debt on your credit card.
Call Your Creditors
Many people don’t know this, but you can simply call and ask for:
- A lower APR
- A hardship plan
- Waived fees
A 5-minute call could save on months of payments. You never know unless you ask.
Strategy 2: Choose the Right Payoff Method
Now that you’ve lowered your interest, decide on the payoff strategy that fits your personality and will help you feel better about paying off your debt.
Avalanche = fastest mathematically
Snowball = fastest psychologically
Snowflake = fastest for daily progress
Pick one and stick with it. Consistency wins.
Strategy 3: Make Payments throughout the Month
Most credit cards charge daily interest, not monthly. So paying once a month lets interest pile up.
But paying multiple times a month:
- Shrinks interest faster
- Cuts your balance sooner
- Makes small payments add up in a big way
Even one extra mid-month payment can speed things up dramatically.
Strategy 4: Review Your Spending and Cut Fast
You don’t have to cut forever…just long enough to crush your holiday debt.
Here’s how to find fast savings:
- Hit pause on eating out
- Cancel unused subscriptions
- Cut clothing, décor, or impulse buys
- Ask: “Do I really need this right now?” before you make a purchase
Even trimming $200-$300 a month and using that money to throw at your debt may cut your payoff time in half.
Strategy 5: Bring in Extra Cash (Temporarily)
A short burst of extra income can wipe out holiday debt shockingly fast.
- Selling items you don’t use
- Picking up a weekend shift
- Doing errands or small jobs for neighbors
- Renting out a room or storage space
- Asking for a raise or taking on extra hours
The key here is to put any extra cash you bring in toward debt. Do not spend it on yourself.
Strategy 6: Consider Debt Consolidation
If you have multiple high-interest cards, consolidating can:
- Lower your overall rate
- Give you one predictable payment
- Reduce total interest paid
- Make your payoff simpler
Consolidation is helpful when your credit is strong enough to qualify for a low rate and you’re committed to not running balances back up.
Key Takeaways
- The best payoff method depends on your style. Avalanche saves the most money, Snowball gives fast wins, and Snowflake helps you chip away daily.
- Multiple payments per month reduce interest and shrink your balance faster. Even small extra payments make a big difference.
- Consistency matters more than perfection. Pick one strategy, stick with it, and watch your balances fall.
Sources[1] American Institute of CPAs (AICPA). Going into debt for holiday spending? You’re not alone.
Journal of Accountancy, published November 11, 2025.
https://www.journalofaccountancy.com/news/2025/nov/going-into-debt-for-holiday-spending-youre-not-alone/
