Snowballing debt? ‘Tis the season, recent data shows.

Two men holding shopping bags, walking outside of a shopping mallImage: Two men holding shopping bags, walking outside of a shopping mall
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

With inflation red hot and the holidays upon us, more people are using credit to get by — and a lot of folks are running into trouble keeping up with payments, November data shows.

Total bank card balances hit a record $866 billion in the third quarter of 2022, according to a November report by TransUnion, with delinquencies on the rise for both credit cards and personal loans. Among Credit Karma members, average credit card debt is up 4.5% since May, data on Nov. 22, 2022, shows.

Key takeaway: Getting strategic about the holidays and working on a plan to deal with debt can help bring relief in the new year.  

Steer clear of holiday spending traps

Nearly 70% of Americans plan to take on debt to cover holiday costs, according to a recent study conducted by Qualtrics on behalf of Credit Karma. But limiting holiday debt can get you off to a better start financially in 2023.

Here are some strategies to try.

  • Make a budget — make cuts. List everything you want to buy and add up the costs. If they exceed your budget, start trimming.
  • Give priceless gifts. It can hurt when you can’t afford things you want to buy for family and friends. But you might be surprised how much your loved ones may cherish a deeply personal present like a long, heartfelt letter.
  • Track your spending. Staying mindful of purchases can help curb impulse buys.
  • Be a savvy shopper. Many retailers are offering deep discounts this year, so watch for sales and coupons. If you charge to your credit cards, see if some strategic use of credit card rewards might help offset some of the cost.
  • Use technology. Deal trackers like Honey and CamelCamelCamel (for bargains on are browser extensions that compare offerings across the web and apply discounts while you shop. Capital One offers something similar.

Protect your credit

One key to guarding your credit profile is staying vigilant, even if your financial situation is challenging and hard to face.

  • Pay bills on time. If you’re falling behind, consider reaching out to your card issuers for help. You might be able to work out a hardship plan that lets you keep your cards in good standing and avoid extra interest or late-payment penalties.
  • Charge selectively. Bigger balances drive up your credit utilization, which in turn pulls your credit scores down. Your credit utilization is how much of your total credit limit you actually use. Generally keeping it below 30% is best.
  • Watch for high interest. Payday loans and title loans can come with costs equating to a 300% to 400% APR or more, and other personal loans can be as bad or worse. The average credit card interest rate in August 2022 was just over 16%, according to the Federal Reserve — much less than a high-cost loan but still dangerous if your balances snowball. If you’re looking for a credit card or personal loan, compare offers and choose the best terms possible for your situation.

Bouncing back from debt

It’s not too soon — or too late — to look into strategies for getting out of debt that can help you get back on track in 2023.

  • Make a repayment plan. The two main debt repayment strategies are the debt avalanche and debt snowball methods. The debt avalanche has you focusing on paying off your highest interest balances first while the snowball plan focuses on paying off your smallest balances first.
  • Consider debt consolidation. Roll multiple debts into a single, new debt that you repay with one monthly payment, ideally at a lower interest rate than the average you’re currently paying on your debt. You may be able to do this with a debt consolidation loan, balance transfer credit card or home equity loan.
  • Research other approaches to credit card debt relief. Think about connecting with a credit counselor. The U.S. Department of Justice provides a searchable list of approved credit counseling agencies.

About the author: Brad Hanson is a senior editor at Credit Karma. His 30 years of experience in print and digital media includes work for the Los Angeles Times-Washington Post News Service, and Polyvore. Most recently before… Read more.