Ways to pay off that holiday shopping debt

Consumer spending soared this holiday season — reflecting high consumer confidence and record employment numbers. The MasterCard holiday spending figures show an increase of 3.4%, amid a huge spike in online shopping. With the stock market near record highs and worries about China trade diminishing, shoppers expressed their optimism by buying gifts.

And now, come the bills. For many people they will be a shock. According to a new survey by MagnifyMoney.com, 78% won't be able to pay off their holiday credit card debt in January. And 15% of those people are making only minimum monthly payments.

At that rate, it could take up to 30 years to pay off those balances, adding more than 4 times the amount charged in interest payments along the way.

It's a widespread problem. According to the survey, more than 44% of holiday spenders took on debt this holiday season. Gen Xers took on the most debt — $2,076, on average.

Now it's time to figure out a response that will help you dig out of holiday debt — and keep you from making your situation worse.

Using multiple credit cards does not divide the pain, or the finance charges. This is the time to add it all up. You don't need a computer. Just pile up the bills and make a list on a piece of paper. Write down the balance, the interest rate and the minimum monthly payment. Post that note prominently on your desktop.

Take your credit cards out of your wallet and place them, along with your other list, in an envelope. Leave it alone. And that also means ignoring those sites that have stored your credit card information.

Those larger outstanding balances ding your credit score very quickly. Go to CreditKarma.com or Discover.com or your bank's website to see your score for free. Then check again next month as you pay down your card balances to see your score increase as you use less of your outstanding credit lines.

One step you can take to ease the process of paying off your balance is to do a balance transfer to a card that offers a zero interest rate for a period of time — allowing you to dig into that debt repayment.

But beware of the hidden traps. If you don't repay the balance during the specified period, your interest rate could skyrocket, leaving you trapped in a worse situation. Check the length of the no-interest period; it could be as short as six months or as long as 18 months. And some of those offers come with a fee that is added to your balance. You can compare balance transfer deals at CompareCards.com.

The CompareCards survey also revealed that despite the best intentions of cardholders who transferred a balance in the past year, only 54% said they paid off the entire balance during the no-interest-rate period — down from 59% the year before.

Finally, we all enjoy looking forward to a reward for reaching our goals. So set one for yourself — perhaps dinner out or a concert ticket if you pay down your card to zero. Just don't charge it. That's the Savage Truth.