How To Avoid Holiday Credit Card Debt

It’s not unusual for Americans to rack up debt when shopping for presents. Here are some tips on how to avoid holiday credit card debt and stay financially sound during the holidays.

Make (and stick to) a holiday gift budget

If you want to avoid going into debt this holiday season, it’s essential to make and stick to a budget for your gift-giving. Start by making a list of everyone you need to buy gifts for, and set a spending limit for each person. Then, start looking for sales and discounts to stretch your dollars further. Finally, don’t be afraid to DIY some of your gifts to save even more money. With a bit of planning, you can stay within your budget and enjoy a stress-free holiday season.

Make a plan for your debts if you can’t pay them off in full

We all occasionally end up spending more than we planned for our loved ones. But if you end up in over your head and go way over your budget, you’ll need to plan how to get your finances back on track. You can research and weigh the benefits of debt snowball vs. debt consolidation, as both are popular options for paying off debts.

There’s also the option of picking up extra work or temporarily cutting back on other expenses until your debt is under control. The worst thing you can do is stay complacent and let your debt acquire more interest, so don’t avoid the situation.

Use coupons and sales

One way to save money is to use coupons and take advantage of sales. By planning your purchases around sales, you can save a significant amount of money. Another way to save money is to use cash-back apps when you shop. These apps give you a percentage of your purchase back in the form of cash or gift cards.

Utilize credit card reward programs

Many credit card companies offer rewards for using their cards at merchants that can get you even better pricing on gifts. Look into which programs your card offers; some popular ones are cash-back on your purchases, statement credits, bonus rewards points, bonus points on gift cards, and others.

Convert rewards points into gift cards

With the holiday season upon us, many of us are looking for ways to stretch our budgets and get the most out of our hard-earned money. One great way to do that is to convert your reward points into gift cards.

Most companies make this extremely easy to do, and the best part is that you can often get more value out of your points by doing so. So if you have a few extra points sitting around, consider converting them into a gift card or two – it could be a great way to save money this holiday season. One tip, though: Opt for electronic gift cards instead of physical ones, as they’re usually delivered faster. You can then email the gift card to your loved one or print out the code and put it in a nice card.

If you want a physical gift card, convert points as early as possible, as some credit card companies may take 6 – 8 weeks to deliver the gift card to your address.

The bottom line

Taking these steps will help you avoid holiday credit card debt and keep your finances in check during the holidays.