How to avoid holiday debt as credit card rates hit 20%

How to avoid holiday debt as credit card rates hit 20%
How to avoid holiday debt as credit card rates hit 20%

It’s always rewarding to buy someone else the perfect holiday gift, but not if it means going into more debt, especially this year.

That’s because credit card rates are now at a 30-year high, making those vacation purchases very expensive.

Jeannie and Kayla Metcalfe were grabbing some of Target’s Black Friday deals, but watching their spending.

“I don’t want a big bill and I don’t want to go into debt,” Jenna Metcalfe said.

Without stimulus checks, more child tax credits and higher prices everywhere this year, they don’t want to go into debt.

“I will definitely try to watch spending this year, especially with the economy,” Kayla said. “Everything between groceries and gas is so expensive.”

Consider how you will pay for each purchase

Holidays should mean joy, not debt. So, while shopping, you shouldn’t just think about what you’re buying, but how you’re going to pay for it.

With average credit card rates now over 21% according to WalletHub, MoneyTips’ Nathan Grant says the first rule of thumb is don’t rely on credit cards if you don’t have the cash to pay off the balance. .

“Don’t think of your credit card as extra money,” he warned. “Think of it as a different way to pay for things you can already afford.”

Grant says retailer credit cards are great for rewards and discounts, but only sign up for cards that fit your budget.

“Even though interest rates on retail store cards are usually even higher,” he said, “if you pay it off every month, that interest rate won’t even be a factor. ”

He says that when budgeting for your vacation, don’t forget to factor in food and travel costs.

And it says to compare your budget to last year, when prices were lower and your checking account may have been full of stimulus payments.

To avoid overspending on gifts, Grant said:

  • Share the cost with someone else, such as a sibling.
  • Give a DIY gift, like something you did yourself, or a service you can do, like painting or cleaning the yard.
  • Use your unused gift cards to buy gifts for others (but be careful when re-gifting gift cards, as you might return them to the person who first gave them to you).

Nathan Grant’s final credit card tip is to look for other cost-saving perks, like price protection if prices drop later.

With price protection, he said, “so credit cards are less of a worry and more of a tool you can use this season.”

Jeannie and Kayla Metcalfe hope to avoid credit card debt altogether.

“No debt in January, hopefully,” Kayla said.

This way you don’t waste your money.


Don’t Waste Your Money” is a registered trademark of Scripps Media, Inc. (“Scripps”).

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