Monday 13 January – brace for festive credit card bills

According to figures from the Bank of England, the average UK household spends around £713 more in the run-up to Christmas than during other months of the year.

With disposal income remaining tight because of high living costs, around 74% of the UK said they planned to spread the cost of Christmas 2024 by borrowing, using credit cards, buy now, pay later etc.

But as the festive glow fades, reality is set to hit inboxes and doormats across the country today (13 January), as that’s the day credit card statements are set to land with a thud.

For millions, these statements will reveal the full extent of festive overspending — a financial hangover that could take months or even years to resolve, with 1 in 10 households expected to be still paying off their Christmas debts in June.

Matthew Sheeran, one of our debt specialist said: “Millions of people rely on credit to cover the extra cost Christmas brings. But lots will be paying off this spending for a long time and, for some, it might become totally unmanageable. Carrying a balance on credit cards can quickly spiral out of control because of high interest rates.

“For instance, even before festive spending began, the average credit card debt per household was sitting at around £2,524. This would take someone only making the minimum repayments on a card with 28.9% APR nearly 27 years to pay off.”

Here are Matthew’s six practical tips for paying off credit card debt and regaining control of your finances.

Create a budget and stick to it

Setting a monthly budget to monitor your income and expenses can help you save money at home. Start by reviewing your monthly income and outgoings. Identify areas where you can cut back—even temporarily—to allocate more money towards debt repayment. An easy starting place is cancelling unused or unwanted subscriptions, saving anything from £100 to £1,000 a year. We have a free budgeting tool you can use to simplify the process. You can also try apps like Snoop, Plum, Emma or HyperJar. Some offer a basic service for free, but you might need to pay to access extra services or features.

Prioritise high-interest debt

There are lots of different strategies for paying off credit card debt. You could try the avalanche method, where you focus on paying off the credit card with the highest interest rate first while making minimum payments on others. Alternatively, the snowball method, where you pay off smaller balances first, can provide the psychological boost needed to keep you focused on your end goal.

Consolidate your debt

If you’re overwhelmed by the number of payments you're making or finding them unaffordable, you could consider transferring your credit card balances to a card with a lower introductory APR or taking out a personal loan with a lower interest rate.

Consolidation doesn’t solve your debt problem. It just replaces multiple debts with one big one, making repayments more straightforward to manage. It can sometimes save you money too. Make sure you factor in any balance transfer fees before making the switch. And if you opt for a loan, remember it’s more borrowing, which can be dangerous if you don’t first address why you’ve run up debt in the first place.

Boost your income

According to Policy in Practice, £23bn in financial support went unclaimed last year, with 8.4 million people missing out on an average of £2,700 a year. Many don’t realise they’re entitled to extra help, especially those who work. Use our online benefit checker to see if you can boost your monthly income.

There are other ways to make extra money too, such as selling unwanted items online, monetising your home by renting out a room or parking space, or selling your skills. A side hustle can generate extra cash to chip away at your debt. Platforms like Upwork, Fiverr, LinkedIn, SimpleHired and Nextdoor are good places to start the search for income-boosting opportunities.

Automate your payments

Automatic payments can save you money by helping you avoid late fees. They can also boost your credit score, as making even small, consistent payments on time can lead to a big improvement over time.

Make sure you’re responsible for the debt

You're responsible for a debt if you've signed a contract with a credit card company. Sometimes, people sign a credit agreement with someone else, like their partner or parent. If both names are on the agreement, you're both liable for the debt. And if one of you stops paying, the credit card company can hold you responsible for the entire amount. But if you're an additional cardholder on someone else's credit card, you’re only liable for the debt if you signed the credit agreement yourself.

You might be able to get your credit card debt written off if your provider didn’t follow the rules. This could be because your creditor didn’t check if you could afford the repayments when you signed up, you felt pressured into signing the agreement, what you were signing wasn’t clear or they increased your limit to an unaffordable amount. If this applies to you, make a complaint to your provider by email so you have a record. Set out why you think they have acted irresponsibly, provide any evidence you have and end the email by asking for the debt to be written off. If you’re not happy with the lender's response, you can take your complaint to the Financial Ombudsman Service.

Seek free debt advice

If your credit card debt feels unmanageable, contact us for free debt advice. We can help you improve your situation by creating a repayment plan, negotiating lower rates with your creditors, or finding the right debt solution for your circumstances.

The sight of a hefty credit card bill after Christmas might be daunting, but it also provides a good opportunity to rethink your spending habits and set financial goals for the year ahead.