6 Steps To Take Now To Avoid a Shocking Holiday Credit Card Bill
Resisting the urge to overspend during the holidays often seems an impossible task. For many, there exists an involuntary “no price is too big” thought process when it comes to buying gifts for loved ones, regardless of your good intentions and budget goals. Whether consumers can afford it or not, our holiday shopping mentality is often to buy something first, then figure out how we are going to pay for it later.
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To avoid the financial stress of a shocking credit card bill after the holidays, there are several steps you can take to save money and enjoy the holidays at the same time. Generally, planning and keeping to a budget is essential. However, conscious use of credit, building cashflow in advance and doing some retail homework will put you in a good position when the time comes to pay for the gift of being generous to others.
Here are six practical steps to take now to dodge a potentially damaging holiday credit card bill — and to make sure you’ll have more money to spend on loved ones, with less going toward costly debt.
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Look Back and Plan Ahead
People get caught up when they are out or online shopping , especially around the holidays.
“Our financial behaviors are highly connected to our emotional state,” said Beyond Finance consultant Nathan Astle. “We often overspend because we get caught up in the moment’s feelings. It’s important to acknowledge that emotions are not harmful; however, they shouldn’t be the sole factors guiding financial decisions.”
No one knows you better than you, but knowing your debt pitfalls and checking your state of mind and spending decision processes in the moment will help fend off your spending triggers, according to U.S. News & World Report.
Pay Off Credit Card Debt Now
Credit cards are a great but dangerous asset. During the holidays, they are relied on more than normal, and their “forget about it until later” nature makes it easy to overspend, which can lead to harmful debt.
According to CNBC Select, getting rid of debt — by balance transferring, consolidating debt and borrowing money — and considering interest rates and fees will help you develop a strategy to tackle future spending. Finding a passive income job, or a low maintenance side hustle, to bring in more money might be a good route to explore as well, per CBS’s MoneyWatch.
Start Your Shopping Early
Knowing what you need to buy for certain people early might yield deals and the reduce the stress of last minute shopping. Early buyers often have a wider range of things to pick from. This means you can select the ideal gifts or holiday needs without having to settle for what’s left on the shelf or cope with out-of-stock situations. Furthermore, you will have more time to study and find the best bargains on your selected purchases.
Whether it’s Halloween costumes, Thanksgiving groceries and Christmas gifts, spreading out purchases over a month or two will help avoid a large, single-month credit card bill. Allocating funds gradually will help you to manage your budget easier and avoid hurried splurging.
Search for Discounts and Deals
Retailers run sales events during holidays to lure shoppers already on the prowl for savings. But regardless of the time of year, there’s a good deal out there if you take the time to look for it. Spending time browsing on the internet or visiting stores for lower prices can save you lots of money.
Pay a bit more attention to apps and browser extensions that automatically search for discount codes and coupons, and take the time to sign up for store newsletters that offer exclusive deals. This is particularly important if you have a lot to buy — or can’t avoid a splurge or two.
Apply for a New Cash Back or 0% APR Credit Card
Being in debt can put a damper on future spending. But should you find yourself needing to use a credit card to cover part of your holiday shopping, it might be smart to apply for new credit and choose an account that offers cash back that can be converted into statement credit. You can then use the statement credit to reduce the amount you owe and minimize your out-of-pocket expenses.
Additionally, if you need to finance part of your purchases, some cash-back cards provide significant welcome bonuses and a 0% intro APR period, which can save you money on interest.
Limit Non-Essential Holiday and Impulse Spending
The holiday season is a charged time of year. Expectations and emotions run high and the urgency of getting the perfect gift — or a gift, period — can cause us to overdo it and spend frivolously on others and ourselves.
Decide what is truly required for your holiday celebrations and cut back on the rest. Simple decorations or homemade food might help you save money while still feeling festive, as will taking a DIY approach to purchases this year.
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This article originally appeared on GOBankingRates.com: 6 Steps To Take Now To Avoid a Shocking Holiday Credit Card Bill
