5 Ways to Manage Your Holiday Shopping Debt

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  • You may find yourself spending more than you planned this holiday season.
  • Whether you're looking for ways to manage holiday shopping debt or avoid taking on new debt this holiday season, there are financial tools that can help.
  • Stick to a shopping budget, look for deals, and consider consolidating your card balances to minimize and manage your holiday debt.

Holiday shopping debt may make you feel discouraged, but there is a way out.

At this time of year, you may feel pressure to spend a lot of money on gifts and holiday experiences. If you've gone overboard while shopping or are looking for ways to keep debt to a minimum as you shop, you're not alone. Many people are feeling overwhelmed financially at this time of year. Here are a few ways to manage your holiday shopping debt.

1. Set a budget to avoid overspending

Are you just getting started with your holiday shopping? You can better manage your spending and avoid debt by setting a strict spending budget. Having a limit in mind as you shop can make it easier to hold yourself accountable and avoid spending more than you can afford.

It's important to remember that the holiday season isn't about giving expensive gifts. It's about spending time with the people you love and showing them that you care. Small, thoughtful gifts go a long way. If you can only afford a few small gifts, that's okay.

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2. Transfer your debt to a balance transfer card

If you've already done your holiday shopping and are now facing a scary credit card bill, you may have another option beyond carrying a balance and paying interest on your debt.

If your debt is unmanageable, you may want to apply for a balance transfer credit card to avoid being charged additional interest. These cards offer 0% interest on balances transferred from other cards, for a limited time. It's not unusual to find cards offering no interest for 18 months or more on balance transfers. That gives you a lot of time to tackle your debt.

By transferring the balance from an existing credit card to your new card, you can consolidate it in one place and avoid further interest charges. Most balance transfer credit cards charge transfer fees -- however, the cost is likely much less than what you'd pay in interest by keeping the balance on another card with a high interest rate.

3. Shop deals to spend less

Looking for ways to spend less this season? It's not too late to score some incredible deals on holiday gifts. Many retailers promote money-saving sales well into December. Take advantage of these deals to keep your holiday spending to a minimum. If you're shopping online, you can also use coupon apps to find promo codes that allow you to get an even bigger discount.

4. Create a debt payoff plan to tackle your debt faster

Don't feel discouraged if you've finished your holiday shopping and you now have debt to pay off. It's in your best interest to create a debt payoff plan, so you know what steps to take and stay motivated on your journey.

Figure out how much debt you have and then calculate how much you can put towards it. Commit to putting as much extra money as you can toward paying it off. Budgeting apps can be an excellent tool to help you cut out unnecessary spending while paying down debt.

If you've done what you can to follow a budget but only have so much extra money, you may consider getting a side hustle to increase your income. There are many flexible side hustles that you can do in your free time -- even if you already have a full-time job. As you bring in more money, you may be able to pay off your debt faster before expensive interest charges get out of hand.

5. Get a 0% APR credit card to finance your holiday spending

If you're still doing your shopping and want to avoid debt, you may want to explore financing solutions. Using a 0% APR credit card is a great way to avoid interest charges. Many of these cards don't charge interest on purchases during a limited-time introductory period. You can find no-interest offers of 15 months or more, which could give you a lot of time to pay off your holiday shopping debt without accumulating interest.

Keep in mind that after the promotional period, interest will kick in. Paying your balance off before the introductory period ends is crucial. Let's imagine you get a card with a 15-month, no-interest offer, and charge $2,400. Paying $160 every month while not using the card to make new purchases can allow you to pay your entire balance off before interest is charged.

Don't create additional financial struggles for yourself

You're not alone if you're dealing with financial stress during the holiday season. Do yourself a favor and take steps to minimize shopping debt and get creative to make existing shopping debt more manageable so you don't create additional personal finance struggles for yourself.

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