Tips for Avoiding Debt This Christmas

Christmas is the most wonderful time of the year – if you’re a credit card company. Billions of dollars are being charged, and those bills could haunt consumers all year long.

If you want to avoid getting buried in Christmas debt, treat your credit cards like the holiday fruitcake nobody wants. Isolate them in a safe place and ignore them when the urge comes to spend.

If only it were that easy.

Unlike that fruitcake, you want to indulge your credit card appetite. Here are ways to at least keep those bills from turning into the Ghost from Christmas Past That Won’t Go Away.

How to Avoid Christmas Debt

At the risk of belaboring the obvious, the fool-proof way is to emulate the people who started this whole holiday giving tradition – Don’t buy anything with a credit card.

Of course, that was easier to do in 0 B.C., when Melchior, Caspar and Balthazar showed up in Bethlehem with gifts for a newborn baby named Jesus.

They were the three kings, though historians debate whether they actually ruled anything. Many think they were scholars, which is why they’re also known as the Three Wise Men.

They were at least smart enough to avoid going broke buying gifts. It’s harder since the invention of the credit card in 1950. The Three Wise Men couldn’t have put their gold, frankincense and myrrh on their Visa cards and just made minimum payments.

Americans won’t buy much of myrrh this year, but they will spend about $730 billion on holiday gifts in 2019, according to estimates by the National Retail Federation. If the experts’ predictions are right, the average American will spend about $925 on holiday gifts.

Three out of every four buyers will use credit cards to pay for at least part of those bills. If you made the minimum 2% payments, it would take almost seven years to pay off your 2019 holiday purchases.

And you’d rack up $610 interest charges!

It’s hard to enjoy Christmas shopping knowing the bills will be coming for years. What’s the best approach to avoid that dilemma?

Stick to a List and Budget

Decide who is worthy of a gift and how much that gift should cost and stick to the plan. Avoid impulse buying, which retailers have become experts at inducing.

A favorite tactic is “framing” or “grouping” merchandise. Retailers place a superior item right next to the one you intended to buy and entice you to step up for the more expensive one.

For instance, they’ll advertise 40-inch TV for $400. When people show up to buy, they notice right next to that display are 55-inch TVs for $520.

Your brain says, “Hey, for just 30% more you can get a much bigger screen!”

That’s the kind of thinking that gets you in such a deep financial hole Santa’s entire reindeer team won’t be able to pull you out. So make a shopping list of names and gifts, and don’t give into the temptation to change it.

Put All Your Purchases on One Card

This helps you keep track of how much you’re spending, and you can transfer your credit card balance to a 0% interest card after all the shopping is done.

Just be careful to read the fine print on such cards, since that 0% grace period expires, usually in 6-12 months. And when it does, the interest rate typically skyrockets.

Shop Alone

It’s hard to stick to that battle plan if you’re hearing, “Ooh, let’s go check out the jewelry sale,” or “You look great in that chinchilla coat!”

Going it alone keeps you focused on the primary mission, which is to buy gifts you won’t still be paying for in 2026.

There is at least one drawback to shopping alone, however. It’s usually not as much fun.

Christmas is supposed to enjoyed, not endured. It’s hard to get in the holiday spirit if you agonize over every penny you’re putting on your credit card.

What’s the best tip to avoid the Bah Humbug Blues?

Plan Ahead

It’s too late for 2019, but Christmas 2020 will be here before you know it. Be ready by starting your personal “Christmas Club” account.

They used to be a popular feature at banks. Customers would open a savings account dedicated solely for holiday use. The first one started in 1909 in Carlisle, Pa. People would donate about 60 cents a week to the fund, and by December they’d have about $28 to spend.

Christmas clubs paid very low interest and had other fees. They eventually lost their appeal, though some credit unions still offer versions.

Consumers are certainly capable of running their own Christmas Club. If you set aside $10 a week, you’ll have about $500 by next December.

How to Get Out of Old Christmas Debt

About 10% of consumers plan to make only minimum payments on their Christmas purchases, according to a MagnifyMoney survey. Santa should put them on his naughty list for committing slow-motion financial suicide.

If you’re one of those unfortunate souls still paying for Christmas 2018, it’s pretty obvious you could use some help getting your finances in order.

You should consider a debt management program. A nonprofit company will consolidate your bills and work with creditors to reduce your interest rates.

Certified counselors will help you set up a budget and devise an overall strategy to free you of all that red ink. But be forewarned, you won’t be able to use credit cards.

Putting them away will be harder than stashing that Christmas fruitcake in the back of your pantry. But the program will not only get you out of debt, it will teach you how to stay out of debt.

As Melchior might say, it’s the wise move if you truly want to make Christmas the most wonderful time of the year.

Tom Jackson focuses on writing about debt solutions for consumers struggling to make ends meet. His background includes time as a columnist for newspapers in Washington D.C., Tampa and Sacramento, Calif., where he reported and commented on everything from city and state budgets to the marketing of local businesses and how the business of professional sports impacts a city. Along the way, he has racked up state and national awards for writing, editing and design. Tom’s blogging on the 2016 election won a pair of top honors from the Florida Press Club. A University of Florida alumnus, St. Louis Cardinals fan and eager-if-haphazard golfer, Tom splits time between Tampa and Cashiers, N.C., with his wife of 40 years, college-age son, and Spencer, a yappy Shetland sheepdog.

Christmas presents sitting under a Christmas tree


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    1. (Fulton, W.) (2018, December 12). How Did the Fruitcake Become a National Joke, and Can It Be Redeemed? Retrieved from:
    2. (Stolba, S.) (2019, November 12). Consumers Plan to Spend 75% More This Year on Holiday Spending. Retrieved from:
    3. (Dilworth, K.) (2019, November 20). Average credit card interest rates: Week of Nov. 20, 2019. Retrieved from:
    4. (Longenecker, D.) (2018, January 5). Who Were The Three Wise Men? Retrieved from: