Worried About Holiday Expenses? Do This Now

It could help you stay out of debt.

The holiday season will soon be upon us, and while it's easy to argue that that's a good thing, for some people, it can be an overwhelmingly stressful time of the year. The reality is that during the holidays, there's a lot of pressure to spend extra money in general. But this year, you might end up spending even more than you're comfortable with due to inflation.

Now if you have savings to tap, the good news is that your holiday expenses may not actually drive you into debt. But let's be real -- if you worked hard to build your savings, you may not want to raid or deplete your cash reserves in the course of buying gifts for all of your siblings and cousins. Instead, you may want to reserve that money for a specific goal, like buying new furniture, or keep it on hand for emergency expenses, like car and home repairs.

If you're worried about your upcoming holiday spending, you have a couple of options. First, you can set (or reset) expectations with the people in your life who are pressuring you to overspend. But you can also see if there's a better credit card rewards program out there than the one you're privy to now. The right program could put a lot of extra cash in your pocket this holiday season -- and make those expenses easier to manage.

What can a new credit card do for you?

Let's say your current credit card only gives you 1% cash back on retail purchases. If you find a card that gives you 3% back during the last quarter of the year, then you can triple the amount of money you get paid back to you in the course of your holiday shopping.

But that's not all. Many credit cards offer generous sign-up bonuses. And while some of those bonuses may be difficult to snag outside of the holidays since they come with a large spending requirement, at a time when your costs are higher than usual, they may be surprisingly easy to claim.

Let's say a given credit card requires you to spend $3,000 within three months of opening your account to score a $250 bonus, but you usually only spend $750 per month on a credit card. If you expect to spend an extra $1,000 on the holidays this year, that puts your spending for three months at $3,250 instead of $2,250. The result? A $250 cash payment that could nicely offset your added costs.

Apply soon

A new credit card could help you get through the holiday season without tapping your savings to an extreme degree. But if you'd like a new card at your disposal to use for holiday purchases, get that application in quickly.

It can take a little time to get approved for a new credit card. And if you're the type of person who likes to do their holiday shopping earlier, you don't want to lose out on better rewards or a sign-up bonus due to poor timing.