Best ways to pay off Christmas debt

If you spent too much over the Christmas period, see if you can take advantage of a 0% credit card to avoid costly interest.

Christmas can leave us under a mountain of debt.

But if the thought of how much you spent over the festive period is now starting to give you a headache, take a look at how a 0% card could help.

If you have credit card debts

If your spending is on a credit card and you're going to be hit by interest charges, see if you can shift it to a 0% balance transfer credit card.

With introductory interest-free periods of up to 39 months on offer, this could give you some vital breathing space to pay off your debt.

These cards aren't completely free though. You'll be charged a balance transfer fee for moving your debt over on most cards.

This is a percentage of the debt you're transferring. So if, for example, you're transferring £2,000 to a card with a transfer fee of 1%, it will cost you £20.

Here are some of the 0% cards with the longest interest-free periods.

Credit card	0% period on balance transfers	Balance transfer fee	Cost of transferring £2,000 balance	Representative APR after 0% period ends
Santander All in One Credit Card*	39 months	0%*	£0*	21.7%
MBNA Platinum 38 Month Balance Transfer Credit Card	38 months	1.44%	£28.80	19.9%
nuba Transfer Credit Card	38 months	2.49%	£49.80	19.9%
Post Office Money Balance Transfer Credit Card	37 months	1.99%	£39.80	18.9%
Halifax 36 Month Balance Transfer Credit Card	36 months	2.5%	£50	19.9%

*£36 annual fee

Compare the cards with the longest 0% period

As you can see the longest lasting deal offers to freeze the size of your debt for 39 months, but beware of the £36 annual fee.

If you think you can pay off your debt over a shorter period of time, you could get a card that doesn’t charge you a fee or comes with a much smaller one.

Here are some 0% cards with the cheapest balance transfer fees right now:

Credit card	0% period on balance transfers	Balance transfer fee	Cost of transferring £2,000 balance	Representative APR after 0% period ends
Halifax 29 Month Balance Transfer Credit Card	29 months	None	£0	19.9%
Sainsbury's Bank No Balance Transfer Fee Credit Card	28 months	None	£0	18.9%
Lloyds Bank Low Fee Balance Transfer Offer Credit Card	33 months	0.57%	£11.40	18.9%
Sainsbury's Bank 33 Month Balance Transfer Credit Card	33 months	0.59%	£11.80	18.9%
Virgin Money 32 Month Balance Transfer Credit Card	32 months	0.6%	£16	20.9%

Compare the cards with the lowest balance transfer fees

If you have an overdraft

If you've gone into the red on your current account, then there are some credit cards that can help. They are 0% balance transfer credit cards that also offer what's known as a money transfer.

A money transfer allows you to borrow money to put into your bank account for an introductory interest-free period. As with a 0% balance transfer, you'll be charged a percentage of your debt for the privilege.

Virgin Money pretty much dominates, but here are the longest lasting deals.

Credit card	0% period on money transfers	Money transfer fee	Cost of transferring £2,000 balance	Representative APR after 0% period ends
Tesco Bank Clubcard 32 Month Balance Transfer Credit Card	32 months	3.94%	£78.80	18.9%
Virgin 32-Month Balance Transfer Credit Card	32 months	4%	£80	20.9%
Virgin 30-Month Balance Transfer Credit Card	30 months	4%	£80	20.9%
Virgin 25 Month All Round Credit Card	25 months	2.7%	£54	18.9%

Alternatively, you could try switching to another current account. The Nationwide FlexDirect account offers a 12-month fee-free overdraft, although the size of your overdraft will depend on your credit rating.

Compare 0% money transfer credit cards

If you can't get a top 0% card

If your credit rating isn't great and you can't get one of the top 0% cards, you could see if you can switch to a credit card with a lower interest rate.

If that isn't possible, then you might be able to pay off your card debts with a personal loan at a lower interest rate than you're paying on the cards.

If you do take out a loan, it's important to rein in your spending until you pay it off. And budget for next Christmas now.

Compare personal loan rates

If you're in serious debt

If your bills are mounting up and you feel like you can no longer cope, don't panic. Free, confidential help is available from a range of sources, including Step Change, National Debtline and Citizens Advice.

Read these next:

Where to get free debt advice

Credit card mistakes that will cost you money