Deal With Holiday 'Debt Hangover'

"I think some people are afraid of even opening up their bills," said personal finance expert Jennifer Openshaw. "But they have to stare Scrooge in the eye and tackle the problem head on. The more people do that, the more confident they'll feel and the more they can do about it."

Consumers have a lot of card debt to deal with. Even before the 2007 holiday spending season began, Americans added more than $50 billion to their credit cards in the first 10 months of the year to reach a record total of $928.5 billion in October, according to the Federal Reserve. The additional spending in November and December undoubtedly pushed balances even higher.

Dick Reed, regional counseling manager with the nonprofit Consumer Credit Counseling Service of Greater Atlanta, said that January and February are the agency's busiest months.

"A lot of people make a New Year's resolution to get their financial house in order," he said. "But often, it's 'I spent too much on the holidays' that actually brings them in."

Reed said that the first step troubled borrowers have to take is to make sure they're current on their home mortgage or rent.

"No matter how bad things get, you need a place to live," he said.

The next step may seem obvious, but a lot of people don't take it, and that's to stop charging on your credit cards. If you don't do that, Reed said, "the bills will only get larger and the envelopes heavier and the stress greater."

Dealing with outstanding balances may require both increased cash flow and an aggressive repayment schedule, he said.

People who are heavily in debt may have to consider steps such as selling their second car, taking a part-time job on the weekends and slashing expenses for dining out and other optional purchases, Reed said. That will free up more cash to apply to debt, he added.