The pressure to purchase gifts during the holidays feels even worse when you are struggling with debt. Learn some tips from our debt help specialists in Ottawa.
During the holidays, it can be tempting to drain your bank accounts buying presents for the people that you care about. Unfortunately, holiday savings don’t always cover everything. Because of this, many people find themselves pulling out their credit cards to make up the difference.
HOLIDAY SHOPPING AND BOXING DAY SALES SHOULDN’T DESTROY YOUR CREDIT
In the heat of the moment during Black Friday or Boxing Day, these attractive sales can seem like the last great deals on earth. Suddenly maxing out every credit card may seem like a good idea. Saving money is always a good thing, right? Wrong. Just because something is on sale doesn’t mean that you absolutely need it. There’s a big difference between splurging on a new car battery that you need, and the latest high definition television for your guest room. Fortunately, there are some things you can do to curtail your spending before you have to spend the rest of the year playing financial catch up on credit card debt.
TIPS FOR AVOIDING CREDIT CARD DEBT BUYING GIFTS
Before the holiday season even arrives, it’s important to minimize your debt opportunities; and then, you’ll need to decide what constitutes as necessary spending. These tips can help:
Evaluate Your Current Credit Cards: Not all credit cards are good for your credit. There are plenty of them that have extremely high annual percentage rates and fees. Consider these fees an extra bill each year that you definitely do not need. While it’s always a good idea to have some credit cards that help build and maintain your credit score, there’s no shame in getting rid of the ones that are costing more than they are helping.
Don’t Rely on Credit Cards for Daily Expenses: If you are spending more than you are making, then you aren’t practicing good spending habits. Relying on credit cards for daily expenses is a red flag. When you get in that position, it’s time to freeze those credit accounts and to stand on your own two financial feet.
Plan your Holiday Spending: There are enough advertisements, wishlists, and layaway programs to allow you to plan your gifts far ahead of time. Keep all your purchases within your budget and remember—there’s no reason to overspend. It’s better and more important to be financially responsible than it is to be popular during the holidays.
Start Saving in Advance: Ask your bank or credit union about a Christmas savings account. Some financial institutions allow you to start putting money back far in advance in order to properly save for Christmas and other holidays. Make sure that you understand the terms of the savings account, as some of them don’t allow you to make withdrawals without a penalty. If this is not available, then consider starting your own savings account separate from household accounts.
Don’t Go Over Budget: No matter how wonderful a sale may seem, if the item is unnecessary, then so is the spending.
Contact us today at D & A Macleod for debt help and credit counselling. We can also help you with useful information on how to protect your credit through the busy holiday season.