PAY IT OFF: A balance transfer deal is a great opportunity to get on top of your credit card debt.
PAY IT OFF: A balance transfer deal is a great opportunity to get on top of your credit card debt. STEPHANIE FLACK

Fun's over for another year but bill is just coming in

THE holiday season is over, now to pay for it all.

Australians racked up an extra $29 billion in credit card debt over the festive season, and without early action plenty of people could still be paying off Christmas 2017 a year later.

Australian cardholders each notched up an average of $1727 in holiday debt based on figures from comparison site Finder. The interest cost alone could top $230 million.

The news isn't all bad.

The average card debt accruing interest has fallen from $2470 in 2012 to $1890 towards the end of 2017.

This suggests we're becoming better at paying off the plastic.

Even so, while four out of five credit card holders plan to pay off their holiday- induced debt over the next three months, the remaining 19 per cent will take longer, and one in 20 expects to still be paying off Christmas just gone at the end of this year. Not a great start to 2018.

One way to trim the tab is with a balance transfer deal.

The period of low or zero interest charges can give credit card holders an opportunity to make headway on their outstanding card balance.

There are currently more than 100 balance transfer cards offering zero per cent transfers. The interest-free period varies, but more than half allow a whole year or more interest-free.

The downside is that simply lobbing your debt from one card to another doesn't address what can be a serious overspending issue.

On top of this, if you can't clear the debt before the zero rate period ends, the remaining balance can attract sky-high cash advance rates.

That makes it critical to use a balance transfer deal to pay off as much of the debt as possible in the interest-free period.

An easier solution can be to pay as much as possible off your current card. Sticking to the card issuer's minimum payments may seem easier on your budget today, but it can drag out the debt for years, even decades. That means paying excessive interest charges - money you could be using to build your own wealth rather than the bank's.

Take a look at the credit card calculator on the MoneySmart website to see how much you could save by making extra repayments.