How to pay off holiday debt and save on interest charges

If you went a bit overboard with the holiday shopping and racked up debt this year, you're not alone. Americans planned on spending $1,048 on gifts, food, decorations and more this past season, according to the National Retail Federation.

Americans are not strangers to carrying credit card debt — about 61% of Americans have a credit card and cardholders carry an average balance of $6,194, according to Experian.

While credit cards can be a great asset, they also make it easy to overspend, which can lead to debt. This is especially common during the holidays when you're buying gifts and entertaining guests and spending more than you usually do.

This is a problem is you can't pay off your balance in full and incur high interest charges. Retailers might offer a lot of discounts during the weeks leading up to Christmas, but you're not getting much of a deal if you end up paying 16% APR or more on your credit card balance each month.

There are plenty of ways for you to tackle holiday debt, but you'll need to consider interest rates, fees and how much you can afford to pay before settling on the best repayment method.

Below, Select reviews the smartest ways to pay off holiday debt so you can start 2020 financially strong.

• Complete a balance transfer
• Consolidate debt with a personal loan
• Borrow money from family or friends

One way to tackle holiday debt is to complete a balance transfer. You can transfer debt from your current credit card(s) to a balance transfer credit card that offers no interest for up to 21 months.

During the intro period, create an aggressive repayment plan so you can start living debt-free. You can divide your balance by the length of the intro period to figure out how much you need to pay each month to have a zero balance before the intro period ends.

For example, if you transfer $3,000 to the Citi Simplicity® Card with a 0% intro APR for 21 months on balance transfers from date of first transfer (after, 19.24% - 29.99% variable APR), you'd need to pay roughly $150 a month. Keep in mind there's an intro balance transfer fee of 3% ($5 minimum) for transfers completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5). So in this case, the balance transfer would cost you $150. Balance transfers must be completed within four months of account opening.

Review the fine print associated with a balance transfer card, since card issuers often set maximum limits on the amount of debt you can transfer, and you can't complete a transfer between cards issued from the same bank. Also take note that good or excellent credit is often required to open a balance transfer credit card.

Personal loans can be a good alternative to balance transfer cards if you have a large amount of debt or don't want to open another credit card. If you used multiple cards for holiday shopping, you can consolidate the balances into a single personal loan. And depending on your credit score, you may qualify for a loan amount that will cover your entire balance.

A personal loan provides you with a fixed amount of money over a fixed time period and at a fixed interest rate. It's rare to find 0% interest rates for personal loans, but rates are often lower than keeping a balance on your current credit card(s).

If you don't have that much debt and want to avoid taking out a personal loan or opening a balance transfer card, you may want to consider asking a family member or close friend for a loan.

Plus, if you're credit score is poor (below 580), you may have a hard time qualifying for a balance transfer credit card or personal loan in the first place.

Borrowing money can be the most affordable way to pay off holiday debt since chances are your family or friend won't charge you interest. But before borrowing any money, set up a repayment plan and stick to it. You don't want to risk damaging your relationship.