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How To Avoid Christmas Credit Card Debt

October 14th, 2013 · No Comments · Credit Cards

by Kristy Welsh

(Last Updated On: February 26, 2018)

credit card wrapped in a big red bow

The best gift you can give your family (and yourself) this Christmas is freedom from credit card debt haunting you for months into the New Year. It is possible. You know it’s possible. It’s simply a matter of deciding on a plan of action and following through.

1) Stick to cash.

If Christmas shopping with your credit card is always a given with you, this might be the year to shake things up a bit.

What if this year you only buy gifts if and when you have the cash on hand to cover them? This may mean spreading out your shopping between now and the big day, but you will probably be surprised at just how much you can accumulate in this manner over the next ten weeks.

Say you find a way to set aside an extra $50 a week for Christmas gifts. That’s 10 $50 gifts, 20 $25 gifts, or 50 $10 gifts!

2) Reduce your spending limit.

It’s easy and understandable to get into the habit of thinking you need to spend the same amount on Christmas gifts every year, if not more. But the fact of the matter is, you don’t.

The only person making the rules is you. And if it’s not, it should be. Don’t allow anyone to dictate how much you can or should be spending on gift-giving. It’s one of the most personal, rewarding ways you have for expressing your love and appreciation to family, friends, neighbors, and colleagues. Why corrupt the experience by spending more than you can comfortably afford?

3) Save more.

If don’t have enough cash on hand to cover the cost of your Christmas gifts, reduced spending or not, go through your weekly budget with a fine tooth comb and make cuts where you can.

Instead of blended coffees from the coffee shop every morning, invest in a travel mug and make your own. Skip lunch out every day and brown bag it instead. Replace your weekend night out for dinner and a movie with a homemade dinner and rented DVD instead.

Depending on the size of your family, these changes could save you considerably over the course of the next 10 weeks, freeing up hundreds of dollars to put toward Christmas shopping.

4) Suggest a gift exchange.

Who doesn’t love a mountain of gifts to tear through on Christmas morning? But is that fleeting feeling of abundance really worth months of financial lack on the part of the people showering these gifts upon us?

Granted, not everyone in your circle of family and friends may be on a tight budget. But chances are good there’s more than one of you, so suggesting a gift exchange — where you draw names and buy just one gift this year (or two if you do family and friends separately) — will not only benefit you but anyone else who may be struggling more than anyone really knows.

5) Only charge as much as you can afford to pay off before the end of the year.

If you don’t see any way of shopping without a credit card this year, particularly if you depend on a holiday bonus to cover the cost of your gifts, then only charge as much as you know you’ll be able to pay off before the end of the year. Or, at the very least, the end of January.

Be careful extending your deadline into 2014 though, as it’s easy to talk yourself into scrapping the whole thing. When you already extend into January, what’s another month, or the month after that? So do your best to pay off Christmas credit card debt before January 1st.

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