Before You Take on Holiday Debt, Do These Things

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

KEY POINTS

  • If you load up on debt now, you might struggle with it well into 2024.
  • Before racking up debt, rethink your spending and consider giving the gift of your time instead of physical gifts.
  • Also look at taking on a side hustle to cover some of your costs outright.


At this point, many people are downright consumed with holiday shopping. And if you have a giant list of gifts to tackle, you may be resigning yourself to closing out the season with a pile of credit card debt.

A recent TransUnion report found that 21% of consumers plan to spend more than $1,000 on the holidays this year, while 30% expect to spend between $501 and $1,000. That's a lot of money to fork over if you don't already have it in your savings account.

The problem with racking up credit card debt for the holidays, aside from the money it can cost you in interest and the credit score damage it can cause, is that being in debt can be a stressful thing. And if you incur a large balance now, it'll mean starting off 2024 in a tough spot. So before you take on a load of debt this month, here are some moves worth making first.

1. Rethink the number of gifts you're buying

It's a really nice thing to want to shower everyone from your second cousin to your child's teacher with a gift this holiday season. But if that's not doable financially without you landing in debt, then look to cut back.

In the case of that cousin you only see once a year, a friendly card might do the trick in making them feel loved. And in the case of your child's teacher, a handwritten note from your child with holiday wishes is a reasonable substitute when you just don't have the cash to pay for an actual gift.

2. Replace physical gifts with the gift of your time

Let's face it -- there are certain people in your life you probably have to get a gift for. But that gift doesn't have to be an item you hand over. Instead, consider the gift of your time.

If you have a sister whose kids are too young to stay home alone, give her and your brother-in-law the gift of a night of babysitting. For your dad, cook his favorite meal and give him the gift of a night of hanging out at your home eating a warm dinner and watching his favorite movie. And for your spouse, plan an activity you can do together that doesn't cost a dime, like going on a nice hike.

Granted, with some people, it's hard to get away with this strategy. Your seven-year-old is probably going to want a toy as opposed to a night of bonding with you. But if you can replace at least some physical gifts with the gift of your time, you can potentially steer clear of debt.

3. Pick up a side hustle

When you're busy working, shopping, running a household, and making holiday plans, finding the time for a side gig may seem downright impossible. But if you're able to boost your earnings modestly in the coming weeks, you can potentially cover your purchases and avoid debt.

Think about gigs that are very flexible -- things like data entry you can do from home and driving for a service like Uber, which you can sign up for as your schedule allows. Even if you're not able to fit much side work into the month of December, any extra dollar you earn is a dollar you don't have to borrow.

Many people routinely incur debt during the holidays. But that could really put a damper on the new year. So consider these strategies before closing out the 2023 holiday season with a lingering credit card balance.

Our picks for 2024's best credit cards

Our experts carefully review the most popular offers and select those that are worthy of a spot in your wallet. These standout cards come with fantastic benefits like generous sign-up bonuses, long 0% intro APR periods, and robust rewards.

Click here to learn more about our recommended credit cards

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow