Debt This Holiday Season
It’s not unusual for spending to reach a crescendo during the fourth quarter of the year, and holiday shopping can take a real toll on our credit card balances. Because let’s face it, no matter how much money you have in the bank, there’s no way the holidays are being cancelled and friends and family are going without gifts. Even during the pandemic, as families were forced to spend the holidays apart, we spent money online and simply had our gifts delivered to loved ones. Unfortunately, with higher credit card interest rates and more people depending on credit cards to cover basic expenses due to the rising cost of inflation, the average debt load has increased significantly.
If you’re worried about stacking up a whole bunch of festive credit this holiday season, here are 5 tips to help you keep your spending in check:
1. Check your credit card balance
It’s all too easy to try and ignore your credit card balance, but by checking it before you hit the mall, you can give yourself a friendly but pertinent reminder of how much you can actually afford to spend. For even more impact, write the figure down on a piece of paper and carry it with you in your purse.
2. Try to control your spending
Create a budget for festive spending and do your best to stick to it. While you might not be used to doing this, it’s a very effective tip for controlling your spending, and provided you can stick to it, will prevent you from racking up the debts this holiday season.
3. Pay off cards with a high rate of interest
If you have several credit cards with unpaid balances, try paying off the ones with the highest interest rate before you spend anymore money. Avoid opening new store credit cards if you’ve still got unpaid debt, even if being told you can buy now and pay later, is a tempting prospect; you’re still incurring fresh debt, whichever way you look at it.
4. Avoid paying with your credit card
There’s a simple psychology behind credit card spending, and because you can’t see the money coming out of an account, it almost feels like you don’t need to take so much responsibility for your spending. However, this can be dangerous, especially if you’ve already got unpaid credit card debt as the holiday season approaches. Instead, try to pay with cash where possible, or your bank debit card. With cash, you may even save money by avoiding service charges from stores for card purchases.
Cancelling Christmas seems a little extreme, but if you’ve got credit card debt, it can feel like this is your only option. However, by following the tips above, you can still gift your loved ones and keep on track of your spending, even if it means tightening your belt come January!
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