Avoid Using Your Credit Cards During the Holidays
Yes, the holiday season is almost here. That means it’s nearly time for the excitement, stress, rush and busyness of the season. It also means that it’s nearing the time of year where a lot of people spend a lot of money on parties, gifts, décor and much, much more.
Unfortunately, it’s easy to wind up in debt trouble during the holiday season. It’s even easier when you’re using your credit card.
Holiday Spending & Credit Card Debt
One major reason that people wind up in debt when using their credit card during the holidays is that they lose track of how much they’ve spent. You likely only receive your credit card statement once a month so, unless you’re very good at keeping tabs of your spending or you’re checking your balance online on a regular basis, it’s very easy to forget about how much you’ve spent. You will likely make many more purchases over the holidays than usual so it can become even harder to keep track of them all. Even a series of small purchases can quickly add up to a lot of money.
Since the purchases made on your credit card don’t come out of your bank account until after you’ve paid the bill, it’s often difficult to budget as well. This can result in being unable to pay your credit card bill in full when you receive it. This means you’ll end up carrying a balance and carrying a balance on a credit card can be very costly.
Most credit cards have very high interest rates. Even if you only carry a balance for a few months after your holiday spending is done, you’re still going to end up spending a lot of money on interest. This is money that you don’t need to spend and that you can avoid spending if you’re careful.
Another reason to avoid credit card usage over the holidays is that it can lead to impulse spending. Since the money isn’t coming directly out of your bank when you spend it, some people are less concerned with how much they’re spending. This can get you into trouble.
Avoiding Holiday Debt
Rather than placing all of your holiday spending on a credit card, make a plan earlier in the year to put some money aside each month for holiday spending. Then you’ll be able to spend cash rather than charging all of your purchases. It’s also very important that you set a spending budget before you head out on a holiday shopping spree and that you stick to this budget. Making an itemized list of what you need and how much it will cost before you start shopping is incredibly helpful and it can keep you from turning to your credit cards when you need to make a purchase.