4 steps to help pay down credit card debt after the holidays

Credit Cards
Posted at 6:00 AM, Jan 19, 2022
and last updated 2022-01-20 06:59:29-05

(WXYZ) — If you're like a lot of people, you may have plunked down the plastic when paying for gifts over the holidays, or, you racked up some serious credit card debt during difficult times over the course of the pandemic.

Whatever the reason, you might be making a New Year's resolution to pay off some major debt. There are some good ways to go about it.

Jennifer Bloom, the director of client engagement at Bloom Advisors in Farmington Hills, she's hearing from clients every day worried about the debt.

"There are always people who call and say, ‘I spent too much over the holiday season. What can I do?’” Bloom said.

She said there are four steps to pay off your credit card debt.

Step 1: Grab a pen and paper and organize.

“I want everyone to write out all of their debt and the corresponding interest rates. Write out a detailed budget – what you currently spend in a month. And I want people to spend some time understanding what their current credit score is," Bloom said.

Step 2: Plan a strategy

Either the "Avalanche Method" or the "Snowball Method" works great.

“The Avalanche involves making a minimum payment on all of your debt, and then using any money that you have extra to pay off your debt with the highest interest rate," Bloom said. "The snowball method involves making a minimum payment on all your debt and then paying off your smallest debt first before moving on to a bigger one regardless of the interest rate.”

Bloom said with the avalanche method, you'll pay less in interest over time, but it requires discipline, and maybe even extra dough from a side hustle to make it work.

With the snowball method, you'll likely pay off a card faster, a big motivator for some, but you'll spend more money doing it.

Other options could include refinancing your debt, or taking out a low-interest personal loan if you qualify.

Balance transfer options can help, but watch out for teaser rates that expire quickly.

Step 3: Ask for a lower interest rate

“Call your card issuer and let them know you’re thinking about transferring your balance out, but that you’d rather work with them and negotiate your rate," Bloom said.

Step 4: Act

Like all New Year's resolutions, Bloom said if you only do it for a month, it'll cost you in the long run.

It's important to remember that you are entitled to a free copy of your credit report every 12 months from each of the three nationwide credit reporting companies.

You can order them online from, the only authorized website for free credit reports, or you can call 1-877-322-8228.

If you call the number, you will need to provide your name, address, Social Security Number and date of birth.