Beat a new year credit card debt hangover and start the year financially fit

Starting the new year with a financial hangover? Take control now, build a realistic budget, pay off credit card debt fast, and manage BNPL purchases to kick off the year financially strong.

It’s a wrap! Decorations might still be lingering, and the leftovers are long gone, but reality is setting in, along with holiday debt and that familiar financial hangover many credit card holders feel after the festive season. If your credit card balance is looking a little worse for wear, or you’re regretting how many Christmas gifts ended up on BNPL… we see you! At MyBudget, we get it, the festive season can add up quickly, and many Australians are waking up with a debt hangover when they’d rather be setting financial goals for the new year.

The good news? It’s not too late to take control and make 2026 your most financially confident year yet. With a few simple steps and systems, you can tackle your debt, get back on track and start the new year feeling financially fit.

While the final numbers are still being tallied, the Australian Retailers Association have forecasted total gift spending to rise to $12 billion, up $200 million (1.7%), with shoppers spending an average of $757 each, a 7.1% increase on last year.

Credit cards, debit cards, cash advances and Buy Now, Pay Later (BNPL) services made much of this festive generosity possible, but now those December expenses are showing up on credit card statements, bank accounts and direct debit schedules, and minimum payments might not even be enough to make a dent in your credit card balance. Relatable? Don’t worry, you’re not alone, and we’re here to help you bounce back!

First things first, let’s get you equipped with the tools you need to get out of debt. Download our free 6 steps to get out of credit card debt ebook. Head straight to page 3 and list your outstanding debts.

1. Make a list of all your debts

Before you can tackle your debt, improve your credit score and start meaningful debt recovery, you need to know exactly what you’re dealing with. List all debts, including:

• Credit cards and current balances
• Credit card interest rates and fees
• Credit limits and minimum monthly payments
• BNPL accounts and payment schedules
• Any personal loans linked to holiday spending
• Don’t forget IOUs to friends or family.

Seeing everything in one place can feel uncomfortable, but it’s also empowering and gives you a clearer picture of your financial situation, cash flow and total unsecured debt. It turns vague stress into clear, actionable numbers and gives you options.

Our tip:

Be honest with yourself. Did you overspend this silly season? Take notes about what you’d do differently, and use tools like MyBudget’s Christmas Budget Calculator to plan ahead for next year.

A good budget is your best ally when it comes to tackling short-term debt, managing holiday debt and creating a realistic debt payoff plan. Start by:

Identify areas to cut back

Look for ways to reduce spending on dining out, subscriptions, or those unnecessary splurges that add up.

Allocate funds for debt repayment

Decide on a set amount you can dedicate each month toward paying off your debt, reducing interest payments and improving cashflow management.

Pick a repayment method that works for you:

• Debt avalanche (also known as the avalanche technique): start with the highest-interest debts first. It’s the most cost-effective method, saving you the most money in the long run.
• Debt snowball (sometimes called the snowball technique): focus on paying off smaller debts first for quick wins that build momentum.
• Feel-good method: prioritise debts causing the most stress, like personal loans to family or friends, for emotional relief.

Need budgeting help?

If you’re not sure where to start, MyBudget’s free Personal Budget Template gives you a clear, practical way to map out your income, expenses and repayments in one place. 

Generally, credit card companies won’t hand you a better deal unless you ask, especially when interest rates and credit interest rates are rising. This step is all about working with your creditors to make your debt more manageable. You might be able to:

• Set up a payment plan that suits your budget
• Enter into a financial hardship arrangement for temporary relief
• Negotiate lower interest rates or even have fees waived.

And here’s the good news: according to AFSA, banks and credit card providers are legally required to consider your request if you’re experiencing financial hardship. So, take a deep breath, grab your phone, and channel your inner negotiator.

Here are a few simple scripts to get the conversation started:

Ask for a lower interest rate:

“Hi! I’m struggling to keep up with my repayments. Is there any chance you could lower my interest rate to help me get back on track?”

Request a payment plan or hardship assistance:

“Hello! I’m finding it hard to meet my repayments. Could we set up a manageable payment plan or discuss hardship options you might offer?”

Waive late fees:

“Hi there! I missed a payment recently and was hit with a late fee. Is there any way it could be waived while I work on getting my finances back on track?”

Negotiating can feel daunting, but even small changes, like interest rate reduction, fewer debit and credit card charges or lower interest charges can add up to big savings over time. If you’d like a more comprehensive guide, check out our article on How to negotiate with creditors. And if it feels too overwhelming, our Debt Arrangements Team can take over the creditor negotiations for you.

Here’s how MyBudget can help:

• Plan ahead with a 12-month view of your income and expenses
• Build a budget that supports your goals and lifestyle
• Automate your finances for stress-free management
• Create a safety net and savings plan to handle the unexpected.

You don’t have to do it alone.

We’re with you every step of the way. Our money experts are just a phone call away to help you achieve your financial goals.

With over 25 years of experience and more than 130,000 Australians supported, MyBudget is here to take the stress out of managing your finances.

Ready to feel confident about your financial future? Enquire online today or call us on 1300 300 922.