Everyone knows that credit card debt is a huge problem around the world, just in the US alone credit card debt affects so many. In most cases the credit card debt is because of irresponsible credit card use, but sometimes it is because so many people are using their credit cards just to help make ends meet every month. We have covered debt and responsible credit card use many times in our blog, but since the holiday season is approaching we wanted to write about irresponsible credit card use during the holidays.
Every year when the holidays arrive people spend a lot of money, many times it is not cash people are using for their holiday shopping, instead they are using credit cards to pay for most of their purchases. This is fine if you are careful not to overspend and you will be able to get it paid back within a few months after the holiday season is over. Once again this is not the case and many people spend way more than they can afford when this time of the year approaches. Christmas is one of the leading times of year for people to dig themselves deep into credit card debt, and then they can only keep up with minimum payments afterwards, and just paying the minimum is going to cost you more and more in the long run when the interest is factored in.
There are many things you can do to help eliminate credit card debt due to the holidays, and once you find what works best for you then you can have a great Christmas every year without causing financial problems for yourself.
- Research other credit cards – If you have a high interest card then try spending some time finding one with a lower interest rate. Many times you can find a good card with a lower interest rate that also gives you other benefits such as 3 months with no interest. A few months of no interest can really help out if you limit what you spend on your card to what you know you will be able to pay back within the no interest time frame.
- Start saving early – This is the best way to go in my opinion, as soon as Christmas is over start putting money away for the following year. Doing this will give you plenty of cash so you don’t even have to touch a credit card, if you can put away $20 each week out of your paycheck starting right after the holidays by the next Christmas you will have over $1000.00 saved up to spend next year when you go shopping. There are many banks and programs you can find that offer special Christmas club accounts, and with many of these you can earn a little extra from interest and special offers many financial institutions offer for these types of accounts.
- Start shopping extremely early – This is kind of the same as saving money all year but instead you could just start doing your shopping in January or February. If you pick up a couple gifts each month by the time the holiday shopping season arrives again you will already be finished, or at least very close to it. Then you can go out and finish the little bit of shopping you have left when the holiday deals come out every year. This is a great way to use your credit card responsibly since you won’t have to charge much if anything at all.
- Search for better deals – I know for me personally I have been doing my holiday shopping strictly online and I have found better deals than I would find at any Black Friday sale and it is much more convenient. Spend some time comparing prices on the web and you can save a lot of money in most cases. There are many sites that offer price comparisons on products that can make this easy. If you do this throughout the year you can save a lot of money and you will not have to deal with the madness of physically going out shopping during the holiday season. It is really a win-win since you can enjoy the convenience of your purchases delivered right to your door and you can also save a lot of time and money.
Hopefully these tips can help you plan better and save some money, and most importantly help you stay out of credit card debt. It is very easy to fall into that holiday shopping trap and maxing out all of your credit cards without even thinking about how you will pay it all back. When using a credit card you should always make sure you will be able to pay it back in a timely manner because the high interest rates of many credit cards will get you deep into debt very quickly.
Image Credits: jimmiehomeschoolmom