Want to Avoid Holiday Credit Card Debt? Make These Moves Now

A little planning could save you a lot of interest.

The holidays may not be on your mind given that we're only in October and fall has barely gotten underway. At the same time, we're only a few months away from the most wonderful and expensive time of the year.

Even if you pledge to keep your holiday spending to a minimum, you might end up racking up a higher credit card balance in November and December than you do most other months. And the last thing you want is to land in a situation where you're stuck carrying that balance forward into 2023 because you don't have a means of paying it off. 

If your goal is to avoid holiday debt this year, there are steps you can take to make that happen. But you'll need to get moving quickly. 

1. Assess your available holiday funds

You may have $200 sitting in your savings account that you don't need for emergency fund purposes. Or, you might have a $100 bonus check from your employer you've yet to deposit.

It's important to get a sense of how much money you have available for the holidays right now, especially since you don't have a ton of time to save up for them. That should give you a starting point so you can keep your holiday plans realistic.

2. Calculate your non-negotiable holiday expenses

Maybe you travel home to visit your parents every Thanksgiving. And maybe it would break your kids' hearts to not be able to put up a tree at Christmas. 

There are certain holiday expenses that may be non-negotiable in your book, and that's okay. The key, however, is to identify what those are and figure out how much they're likely to cost you. If you determine your non-negotiable expenses total $1,000 and you have $300 to work with, that means you have until those holiday bills start rolling in to scrounge up an additional $700.

3. Ramp up your savings

Once you're aware of what shortfall you're looking at for holiday spending purposes, you can take steps to save that money to avoid winding up with a credit card balance. One option is to cut back on spending substantially for a couple of months. Will that be difficult? Probably. But it's only for a limited period of time, so try to keep that in mind.

Another good way to save up extra holiday cash is to get yourself a side gig on top of your main job. If you're able to earn an extra $100 a week between now and late December, you might manage to close out the holidays debt-free. And who knows? You may find that you like your side hustle enough to keep doing it after the holidays are over, thereby boosting your savings for next year's festivities.

Racking up holiday debt can leave you feeling stressed and frustrated as you gear up for a new year. And that's not what you want. Rather than run that risk, do your best to avoid holiday debt -- and the costly interest that can come with it.