5 Ways To Avoid Credit Card Debt This Holiday Season
Written by
Crystal Mayer
Edited by
Jenna Klaverweiden
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
As the holiday season approaches, many people grow apprehensive about their spending. A U.S. World News & World Report survey found that 79% of people are concerned about having enough money for gifts this season. In fact, 41% of respondents reported being “very” concerned.
One way shoppers are planning to cover holiday spending is with credit cards. According to the survey, 63% of people planned to use one to two credit cards to pay for holiday-related expenses. While credit cards may be most people’s go-to form of payment, going into debt can have long-term consequences.
Here are five ways to avoid credit card debt this holiday season.
1. Set a Budget
Experts with Mutual of Omaha explained that the first step to avoid holiday debt is setting a realistic budget. When setting a budget, it is important to take everything into account, from gifts to decorations and even travel.
Expenses during the holidays can escalate quickly, resulting in financial hardship. Planning ahead can help ensure that the new year is not filled with buyer’s remorse.
2. Remove the Emotion
The American Pacific Financial Services Corp. advised shoppers to avoid emotional spending in order to stay on track financially during the holidays. The nonprofit noted that emotional shopping can lead to overspending. Instead, the debt relief assistance organization recommended taking a step back before making a purchase.
Too often people feel pressured to buy pricey presents for friends and family, despite the potential for future financial frustrations. Leaving an item in the cart for a day or waiting 24 hours to make a purchase can help to make sure that the item is not being bought from emotion but is instead reasonable and within budget.
3. Think Homemade
Instead of buying expensive gifts, consider making something for loved ones. Giving a homemade gift can save money, particularly if it is done in bulk.
A 2025 Holiday Survey from Deloitte found that 39% of people are considering making handmade gifts this year instead of buying them. A DIY gift can include anything from baked goods to a personalized cup, and it may mean more than something purchased at a store.
4. Look for Deals
Another way to avoid going into debt around the holidays is to shop deals and discounts. The Deloitte survey found that 7 in 10 people plan to engage in “value-seeking behaviors” this holiday season. An astounding 75% of respondents planned to shop deals during October and November. Nearly half (49%) reported that getting a deal was a key consideration in where they would shop.
5. Pay in Cash
Finally, one surefire way to avoid racking up a credit card bill is by using cash for holiday shopping.
Experts of Mutual of Omaha recommended using the envelope method, which involves placing the budgeted amount of cash for each item into separate envelopes. For the holidays, envelopes could be labeled by category, such as food, gifts and decorations. Once the money allocated in the envelope is spent, no more can be used for that particular category.
Putting the credit card away can help avoid temptation at the store and ensure a fruitful start to the new year.
More From GOBankingRates
