How to avoid holiday debt this season

How to set a holiday limit you can pay off

1. List what you will pay for Write down every gift, meal, trip and party you plan to pay for this season. Add a line for the costs people forget, like shipping, wrapping and decorations.
2. Find the amount you can pay in full Add the cash you have set aside for the holidays to what you can save before your January card bill is due. That total is your limit. It is the most you can spend without carrying a balance.
3. Split the limit before you shop Give each person and each event a share of the limit. Write the amount next to each line of your list.
4. Track each purchase Put holiday spending on one card or one account, so the total is in one place. Write down what you spend as you go. When a line reaches its amount, stop or move money from another line. Keep the total the same.
5. Pay the January bill in full Pay the whole statement balance by the due date. If your card has a grace period, you may not be charged interest on those purchases. Card companies do not have to offer one, so check your card’s terms.

What $1,223 of holiday debt costs on a credit card

Say the season ends with $1,223 on a credit card at 22.15% APR on January 1, 2027. You pay the same amount every month from February, and you make no new purchases on the card. Every number below comes from the same code as our free credit card payoff calculator.

The table assumes the APR stays the same, you make no new purchases and you pay no fees. Interest is the balance times the APR divided by 12, rounded to the cent each month. The last payment is smaller than the others.

• At $50 a month, you still owe $924.80 after the November 2027 payment, almost a year later. The last payment is in October 2029.
• At $150 a month or more, the balance is paid off before November 2027.
• Paying $320 a month instead of $50 pays it off 29 months sooner and saves $361.85 in interest.

Holiday debt statistics for the 2025 season

LendingTree surveyed more than 2,000 US consumers about the 2025 holidays. Here is what it found.

• 37% of consumers took on holiday debt.
• The average holiday debt was $1,223, up from $1,181 the year before.
• 41% of those with holiday debt were still paying off the previous year’s bills.
• Of those with holiday debt, 62% had it on credit cards, 35% on buy now, pay later loans and 32% on store credit cards.

If you already have holiday debt

Pay more than the minimum each month, and stop using the card until it is paid off. When you do not pay the balance in full, you can lose the grace period. The Consumer Financial Protection Bureau says new purchases are then charged interest from the date you make each one.

Type your own balance, APR and monthly payment into the free credit card payoff calculator. It shows the months, the interest and the payment for every month. It runs in your browser with no sign-up. For a larger balance, see how long it takes to pay off $10,000 of credit card debt.

Holiday debt on top of other debts? List them all and pay them off one at a time with the debt snowball or the debt avalanche. How to start paying off debt walks through it with a 4-debt example.

Paying for some gifts in installments? See how to pay off buy now, pay later plans. It shows which to pay first and what to do with a plan’s payment when the plan ends.

The example button opens the same $1,223 at 22.15% APR and $50 a month in the free debt payoff calculator. Add an extra payment to see how much sooner it is paid off.

Where the numbers come from

The holiday debt figures come from a LendingTree survey of more than 2,000 US consumers about the 2025 holiday season. We checked each figure in the HomePage News report of January 5, 2026.

The 22.15% APR is the average interest rate on credit card accounts that paid interest at commercial banks in the second quarter of 2026. It is the series “Accounts assessed interest” in the Federal Reserve G.19 Consumer Credit release of October 7, 2026.

The rules on paying in full and new purchases come from the CFPB answer on credit card grace periods.

Track the payoff on iPhone

Debt Payoff Planner: Tracker is an iPhone app for paying off debt with the snowball or avalanche method. You type in your cards and loans, and it plans the payoff and records each payment. It is free for up to 3 debts, with no account and no bank link. See it on the App Store.

When to talk to someone

• If your payments take more than you can cover each month, a nonprofit credit counselor can go through your budget and your debts with you. The Consumer Financial Protection Bureau says credit counseling can be free or low cost, and that counselors may charge for some services. It points to the National Foundation for Credit Counseling (nfcc.org, 877-360-6322) and the Financial Counseling Association of America (fcaa.org). Get any fee in writing before you sign up.
• If a debt collector or your card issuer treats you unfairly, you can submit a complaint to the CFPB at consumerfinance.gov/complaint or (855) 411-2372, Monday to Friday, 9 a.m. to 6 p.m. ET.
• If a company wants a fee before it settles any of your debts, the FTC calls that a warning sign. You can report it at ReportFraud.ftc.gov.
• If you are sued over a debt and your income is low, a legal aid office may help for free. Find the one near you at lsc.gov.
• If money worries leave you in crisis, call or text 988 to reach the 988 Suicide & Crisis Lifeline. It is free, confidential and open 24/7. In an emergency, call 911.

Outside the US, look for a free debt advice service run or approved by your government.