University of Illinois Extension

Control Your Holiday Credit Card Debt

The holidays should be a joyful time for you and your family. But for many families it's tough to find the extra cash for holiday expenses. Using your credit card solves that problem for now but can create other problems. Most families don't plan to run up high balances on their credit cards during the holidays - it just happens. Nearly one-third of adults say they spent more than they planned on holiday gifts. Most spent $100 to $500 more than they planned. Many families find it hard to pay off an extra $500 on their credit cards after the holidays.

How can you control your holiday spending? Start by making a written spending plan for the holidays and gift giving. Start making your plan no later than October or November. Think about how much you can afford to spend for gifts as well as decorations, holiday meals, and travel.

Set spending limits for gifts for each person as well as for the other items in your plan. Start looking for bargains early. If it's been a tough year for you, think about cutting back on what you usually spend during the holidays. Talk with friends and family about not exchanging gifts, drawing names so you give fewer gifts, or setting dollar limits on gifts.

Decide if you are going to use a credit card for holiday spending. If you decide to use only cash or a debit card, leave your credit cards at home when you go shopping so you won't be tempted. If you write checks or use a debit card, be sure to record each purchase in your register and figure the balance before writing another check. Stay within your limit!

If you need or want to use a credit card, pick just one to use for your holiday spending. It's much easier to control your spending on one card than on three or four. Write your spending limit on an envelope and put it in your wallet. When you use your credit card, write the amount on the envelope and subtract it from your limit. Put the receipt in the envelope. When you've reached your limit, stop using your credit card!

1 | 2 | 3 | Next >>