My simple message for those with holiday debt
Holiday debt rose a bit in 2025, and many people found themselves thrust into it unexpectedly. Here's what you need to know.
Hi, my friend.
I hope you’ve had a wonderful holiday season filled with love, laughter, joy and good health.
Honestly, it has been a challenging year for me and my family — pretty much from start to finish — but I’m hopeful that 2026 has better things in store.
A difficult holiday season
It has been a challenging year for many Americans as well, of course, and the holidays are proving to be no different. LendingTree’s latest survey found that holiday debt is up slightly this year to its highest level since 2022, though still well below that year’s record high of more than $1,500. A few more key points include:
The average holiday debt this year, among those who ran up holiday debt, was $1,223.
37% of Americans took on holiday debt this year.
Slightly more than half of those who took on holiday debt didn’t expect to.
That last number is particularly troubling. It is one thing to take on a little bit of debt when you can see it coming. It is something else entirely to be blindsided by it. It can absolutely rock your world, and that’s where so many Americans find themselves today.
Remember how powerful you are
When you are hit with unexpected debt, it can be easy to feel powerless and hopeless. There are so many things in life that are out of control. (For my family and friends, this year has been FULL of them.)
However, if you’ve subscribed to this newsletter for very long or if you’ve ever seen me in interviews or read quotes in news articles, you may be able to predict what I’m about to say. Still, I’m going to say it again because it is especially important this time of year.
Here it is…
You have way more power over your money than you realize.
Read it again — this time out loud.
It is my ongoing mission to make sure that people understand just how true that statement is, but I also want to help them understand how they can use it. There are a million ways to do that, but for now, I’m just going to focus on one — using it to ease your credit card debt burden.
Using your power to reduce your debt
If you have credit card debt from the holidays or for any other reason, it can be really scary. Trust me, I know. I had $10,000 in credit card debt in my 20s from bad decision after bad decision. However, in today’s world of stubborn inflation and high prices, you don’t have to make bad decisions to run up debt. Sometimes it can just be a result of living life.
Here are some things that can help…
Calling and asking for a lower interest rate. Again, if you’ve followed me for a while, you know this, but it will always bear repeating. I even wrote a post about it called “I’m never going to stop talking about this” because I never will.
I won’t stop talking about it because it works (more than 80% of the time, according to the latest LendingTree data). Simply calling and asking for a lower rate can lead to an average APR reduction of more than six points — which is like going from a 25% interest rate to 19% — and can mean very, very real savings.
How do you do it? I lay it out in the post linked above. Or I go into even more depth in my book, “Ask Questions, Save Money, Make More: How To Take Control Of Your Financial Life.” It often doesn’t take more than a little big of legwork and a phone call. It can absolutely be worth your time.
Consolidating your loan. This means taking one loan (or sometimes multiple loans) and paying them off with another separate loan with a lower interest rate. Among your best options for this are a 0% balance transfer credit card or a low-interest personal loan. Both of these loans can help you pay less interest over the life of your loans. A 0% balance transfer credit card is perhaps the best option, though you’ll need good credit to get one. If your credit isn’t good enough, a personal loan can be a great second choice. Just make sure to shop around for the best rates, and to be sure that you understand any fees, limits and other fine print associated with these loans because what you don’t know can cost you.
Seeking credit counseling. If it is all too overwhelming and you just want some help, an accredited nonprofit credit counselor can be a tremendous asset. The National Foundation For Credit Counseling (NFCC) is perhaps the best place to start. (Note: This isn’t an ad. Just some actual heartfelt advice.) That organization has been helping people with creating budgets, negotiating with creditors and everything in between for many years, and they can be useful to you as well.
Ending on a sweet note
Because it all shouldn’t be so serious on Christmas, here’s one of my favorite pictures of my sweet dog, Theo, to send you on your way.
Happy holidays, my friend.
Until next time!
Matt