Are credit cards a blessing or a curse? Well, it all depends on your spending habits. With good habits, using a credit card actually saves you money since you can earn cashback or other rewards. With bad habits, you’ll be contributing to the average credit card debt statistic in a bad way.

Credit cards can also help you to build a credit score and to improve it. At the same time, it can bankrupt you with debt if you don’t manage it properly.

A survey (source: on the Christmas spending of 2019 indicates that about 21.5% of people experienced debt problems after the holiday season.

About 56.3% of people who bought gifts had a budget, but only 64% of these people were able to stick to their plans.

Another survey (source: conducted in Jan 2019 revealed that only about 42% of people were confident that they would be able to repay their holiday purchases in three months or less.

You must use your credit cards responsibly so that you don’t rack up credit card debt during the holidays. Here are eight tips to help you stay out of debt!

1. Understand that using a credit card is the same as borrowing money

It is quite important to understand that a credit card is a type of loan. What you’re borrowing, you’ll have to pay it back.

If you can’t repay it before the bill due date, then you’ll have to pay interest on it. Make sure you take the interest rate (which is insanely high on credit cards) into account if you’re planning on not paying your bill.

2. Do not roll over from one billing cycle to another

The most important thing is to pay your credit card bill every billing cycle. Do not be tempted to pay the minimum amount so that you can use your money elsewhere.

There’s a simple rule to follow. Do not use your cards for an amount that you won’t be able to repay within that billing cycle. This is the key to you avoiding holiday debt.

3. Have a budget to avoid overspending

This is an extension of the previous point. To avoid holiday debt, you’ll have to have a budget so that you don’t overspend.

Two to three months before the end of the year is the right time to plan your holiday budget to maximize savings – and not get pulled into impulse purchases that you can’t afford.

Having a budget early also gets you in the mindset of checking on deals and grabbing the lucrative ones.

4. Check where you can cut back on expenses

One way of doing this is to differentiate between your essential and not-so-essential expenses. You have to make your spending decisions before you visit the stores or shop online.

For example, you can reduce eating out or designate a lower amount for gifts. Making handmade gifts is also a good option to reduce expenses and making your gifts more special!

5. Take advantage of rewards credit cards

Many credit cards offer some kind of reward structure. This could be in the form of cashback, points, or straight up gifts. If you’re short on money, then using the rewards you’ve built up is a good way to afford some gifts for your loved ones.

If you’re redeeming your hard-earned reward points, then take a look to make sure that the redemption option you’re choosing gives you a reasonable bang for your buck. You would think that all of the options should be of roughly equal value, but some redemption options only give you a fraction of what your reward points are worth.

6. Opt for receiving text message or email alerts

Are your credit card service providers offering free alert services? If yes, then opt for it. It can help you rein in your spending.

You can set up daily alerts to get notifications about your outstanding balance; that is, how much you’ve spent.

You can also make payments to your card multiple times a month to keep your credit card account balances under control. It feels good to see your account balance decreasing, and it also doesn’t hurt with staying under budget.

7. Use a separate credit card for holiday spending

Even if you get daily alerts, it can be a bit difficult to differentiate your holiday spending from other expenses. So, it is better if you use a separate credit card for holiday expenses if that’s an option.

Suppose you set a budget of $2,000 for the holidays. When you use a separate card just for holiday expenses and get daily alerts, it will be super easy to see exactly how much you have spent.

8. Plan well ahead of time

You can look for options and grab the best deals when you start early. Therefore, start your planning as early as possible. Many people start shopping for the next holiday season just after the holidays are over to take advantage of the boxing day deals.


So, now you can use your credit cards responsibly to avoid holiday debt. But, what if you already have credit card debt?

In this situation, it is important to repay your high interest credit card debts as fast as possible. You’ll be hard pressed to find a loan with a higher interest rate than your credit card so paying it off should be the top priority.

If you’re not able to pay back your debts on your own, then you can seek help from credit card debt relief programs. Depending on your financial situation, you can enroll in a consolidation or settlement programs and get rid of debts with professional guidance.