How to Avoid Holiday Credit Card Debt This Season

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‘Tis the season for giving — but that doesn’t mean you have to give it all and build up a holiday credit card debt. With so much holiday excitement during this time of year, it’s easy to overspend. Credit cards make it simple to swipe endlessly without thinking about the consequences. Unfortunately, this can result in a lot of unnecessary credit card debt for those who aren’t careful. 

The holidays might be the most wonderful time of the year, but you need to keep a close eye on your finances. Aussies spend an average of $1325 per family during the holiday season. If you have to rely on credit card debt, that’s quite the burden to place on your household budget. In this guide, we’ll share how to avoid the dreaded holiday credit card debt. 

1. Cut Down on Gifts

It’s tempting to go overboard with gifts year after year. Who doesn’t want to treat the ones they love? Unfortunately, a lot of gifts go to waste. Instead, be mindful of the gifts you give. As a family, you might choose to host a secret Santa gift exchange or a white elephant exchange. There are a lot of ways to cut down on how much you spend on gifts overall. 

If you have kids of your own, you can take a new approach to gift-giving. Instead of getting everything on a child’s wish list, give them something they want, something they need, something to wear, and something to read. This is a cute, memorable tradition that celebrates the season without a huge price tag. 

2. Use Your Credit Card Rewards

Credit cards aren’t all bad. Most credit cards today have some incentives like rewards programs. Looking into your cards’ rewards could help you cut down on seasonal spending. 

For example, many cards offer cashback or deals for grocery shopping or travel. This could help you achieve a low-cost Christmas dinner or even less expensive travel to reach your family. If you’ve earned points throughout the year, you can put these towards gifts or other seasonal goodies. 

3. Set Spending Limits To Avoid Holiday Credit Card Debt

The fundamental rule of the holiday season (and all seasons) is to set a budget. If you don’t have a budget, it’s easy to max out your credit card limit. This puts your credit rating at risk and places a major strain on your wallet. 

Set clear spending limits. Choose which credit card you’ll use if any, and choose a budget you can afford. It’s a good idea to stick to a single card so you can easily monitor your spending throughout the season. You can even set alerts with your credit card so you know if your balance reaches a certain level. 

4. Monitor Your Accounts

Credit card fraud happens all the time. Dealing with credit card fraud and identity theft is the last thing you want to do during the holidays. Believe it or not, credit card fraud is on the rise. Making sure you’re protected is a key step to protecting your financial future. 

This is especially true when shopping online. Make sure you follow these tips to protect your credit information over the internet:

  • Only online shop while on trusted, secure wifi networks
  • Be careful making purchases from third-party websites 
  • Link your website to a secure payment system like Apple Pay or PayPal
  • Check online stores for security measures
  • Monitor your account frequently

If you suspect your account is at risk, contact your credit card company immediately. They should have a fraud process for dealing with this promptly. 

5. Avoid Opening New Cards

Finally, avoid the temptation to open any new cards during this time of year. It’s tempting to get a new line of credit to help you afford that amazing gift, but think about how much this will cost you long-term. Credit cards are a temporary solution to a much bigger problem. Sure, they give you access to more funds in the present, but you’ll end up spending more over time. 

Instead of opening a new card during the holidays, find ways to earn extra cash. You might start your own side hustle, pick up extra hours at work, or stop paying for unnecessary services. Creating a budget is the best way to stay on top of the funds you currently have to see where you can afford to cut back. 

Debt-Free Holiday Cheer

There’s no need to feel the pressure to spend during the holiday season. The best things in life really are free! As long as you’re spending time with your friends and family, you can leave your credit cards at home. 

While some spending will likely be necessary, make sure you’re careful about credit card spending. The holiday debt trap is easy to get into but hard to get out of. You don’t want to spend your New Year recovering your finances from your holiday spending spree! If you’re feeling the financial pinch this holiday season, get in touch with us now on 1300 368 322 to sort out your debts for good!

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Debt Busters is an Australian owned business which was founded in 2005 - since then we have been able to help thousands regain financial control.

Debt Busters prides itself on providing a dedicated Client Service Manager to work closer with you and provide a higher level of customised service about your situation.