It’s no coincidence that every year a common problem plagues nearly every household just after the holidays: a sudden rise in credit card debt. We all say we’re going to do things differently next year. We make plans to save towards a Christmas shopping budget. We say we’ll start saving little by little throughout the year. We even say we’re going to start our Christmas shopping early this time. But it never happens.
We all get so caught up in the excitement of the holidays that we forget about our plans and commence with the charging. If last year’s holiday season put you in need of financial relief from an installment loan, you might want to consider changing your game plan this time around. But for those of you who still plan to use credit cards to fund this year’s holiday shindigs, there are ways you could do so without going overboard. In fact, you might actually end up saving money if you play your cards right.
If credit cards are your only option this year, there are ways you can use them responsibly. For starters, sit down and make a list of all the things you’d typically buy in preparation for the holidays. It might look a little something like this:
Now, see if there’s anything on this list you can do without or do differently to save money. For example, you can probably go without the eggnog this year. As for family photos, don’t pay a photographer. Grab a selfie stick and use your smartphone to make your own! Cookies? Ditch the store-bought ones and make them yourself! Little changes like these can go a long way.
Credit cards are well-known for their built-in reward programs. The types of benefits and APR vary from card to card though. If you can, pick a card with the lowest APR and biggest cash back combination. If you’re going to add a little debt over the holidays, you might as well use a card that could help minimize the damage. Also, for the weeks leading up to Christmas, you might want to switch from using your debit card to your credit to pay for everyday items. This may sound counterintuitive, but it could put some extra cash in your pocket before the holidays. Simply charge your card for everyday things like gas and groceries, then follow up with a dollar-for-dollar payment on the card you charged. This way, you could rack up the cash back points without tacking on more debt.
December is the biggest shopping season for most and also happens to be the last month before the new year, a time we’re given to start again and learn from past mistakes. If you’re not ready for the upcoming holiday season, you could always use the above tips to help minimize the damage. After that, the best thing you could do for yourself is to make a budget and stick to it so that you’re better prepared for next year. And with New Year’s Eve on the horizon, it’s the perfect time to do just that.