The holiday season is supposed to be a time to celebrate and spend time with loved ones, yet for the bulk of Americans, this last one was also a time for making poor financial decisions. But of all the blunders we managed to collectively fall victim to this past December, perhaps the most egregious was taking on undue amounts of credit card debt.

In fact, the average American is now $1,054 deeper in the hole coming off the past holiday season. That's the latest from MagnifyMoney, which also confirmed that this figure represents a frightening 5% increase from the previous year.

Woman sitting at a cluttered desk, putting a hand to her head while clutching a stack of papers.

Not surprisingly, most consumers who racked up debt late last year did so in the worst possible way -- by charging their purchases on credit cards and then carrying those balances forward. Furthermore, while the average U.S. adult took on just over $1,000 in debt over the holidays, we can't ignore the fact that 5% of consumers accumulated upward of $5,000 in credit card balances. Ouch.

And the worst part? It doesn't look like that debt will be going away anytime soon. A good 50% of consumers say it will take more than three months to pay off their balances, which means they're apt to lose a chunk of money to interest charges as a result.

If you're coming off the holiday season with a huge wad of debt and an equally large pile of regret, you should do two things. First, start saving now for the upcoming holidays so you don't wind up in the same predicament again. Secondly, devise a plan to tackle that debt quickly so it doesn't cost you more than it needs to.

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Digging out of holiday debt

Even if you're like the typical American and only racked up around $1,000 in credit card debt this past holiday season, you still stand to lose a fair amount of money in interest charges if you don't promptly repay what you owe. Imagine it takes you two full years to pay off a $1,000 balance at 20% interest. Suddenly, you stand to throw away over $200 for no good reason. And that assumes you're only dealing with a 20% interest rate -- many cards charge considerably more.

A better bet? Work on knocking out that debt more efficiently so you not only lose less money, but have a better opportunity to save more for the coming holiday season. The best way to start is by creating a budget if you don't have one in place already (most Americans don't). This way, you'll have a clear sense of where your money is going, and you'll see how much income you could potentially have left over each month to apply to your outstanding debt. (Of course, if that figure is somewhere around the $0 mark, you'll need to work on cutting expenses -- which, incidentally, is something you should do anyway if your current setup doesn't leave you with much wiggle room for savings.)

Next, review your various credit card balances (assuming you have more than one) and see which come with the highest interest rates. You'll want to pay these off first, and then move on to those debts that are less expensive. Another option? Look into a balance transfer, which will enable you to consolidate various debts onto a single credit card, and ideally, one with a lower interest rate. If your credit is strong, there's a good chance you'll qualify for a decent offer.

Finally, consider getting a side hustle to not only drum up extra cash to apply to your outstanding debt, but sock away ahead of the upcoming holiday season. You don't necessarily need to spend every waking hour working, but if you're willing to, say, pick up a couple of shifts per week at a local retail establishment, or take on one or two freelance assignments each month, you're apt to have an easier time eliminating that debt sooner rather than later. Keep in mind that right now, stores are still pretty busy with holiday returns, so if you're thinking that's your best bet for snagging some extra work, it pays to get moving while the opportunity exists.

Clearly, the average U.S. consumer didn't plan very well for the past holiday season. If you're part of that statistic, let this be your wakeup call: Taking on debt can harm your finances not just in the near term, but in the long run as well. Since it's no secret that the holidays can be costly, do yourself a favor and start planning ahead for this coming December. With any luck, you'll avoid the dangerous mistake so many Americans just made.

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