4 Tips to Avoid Holiday Credit Card Debt

Want to avoid holiday debt this year? It’s no surprise that Americans rack up a huge proportion of their credit card debts during the holidays traveling, spending and gift giving.

During the Christmas season the average American household’s credit card debt spikes up. According to NerdWallet’s 2017 Consumer Holiday Shopping Report, gift-buying Americans planned to spend $660 on average. Half surpassed that budget largely. 27% also admitted they had no budget at all and freely spent. Every season, shoppers intend to use their credit cards to fund their purchases. Then they find themselves stuck in last year’s debt the following year.

Watch Travel Expenses

Be realistic, either expense the trip and skip the gifts or vice versa. Travel is one of the biggest reasons we accumulate credit card debt over the holidays. Very few American families can afford to take that cross-country vacation to visit the in-laws. Social and familial pressures of the holidays will often cause families to add to their debt.

Purchase Gifts Early

Make room in your money budget to purchase gifts little by little. This helps so your finances don’t spiral out of control from November to December. To be blunt, planning ahead won’t necessarily make you immune to credit card debt. But it is a way to ensure you’ve got breathing space both for paying off your debts and spending during the season. Planning will let you understand if there’s any spending you can do without, freeing up money for holiday spending. A detailed plan will help you make payments on time – avoiding penalties and avoidable interest payments.

Avoid Minimum Payments

While money might be tight these holidays, never pay just the minimum on your credit card. While it might seem manageable, you will always be paying more in the end. Paying only the minimum is a huge factor why many are still paying off last years’ gifts.

Put Thought in Your Gifts

When buying gifts for others, try to make sure that it’s something meaningful. A gift is supposed to be a thoughtful gesture, they don’t always have to be lavish expensive wants. Be practical and make sure you can afford what you are purchasing from family and friends.

Stay on track for your Christmas shopping this season by being realistic, having a detailed money budget and paying off your balances on time. If you find yourself still sweating from last years holiday debt, Americor offers debt consolidation and conditional lines of credit to clear your debt and help you start over with your money. Check out our article on how to budget money and how does inflation affect savings.