It’s no fun to go into the holidays when you’re already in debt. I remember my long-ago holiday season of credit card debt and how stressful it was. So, I know it’s tough, and I empathize with your situation. But I got through it without making my debt worse, and you can, too.
Right now, make a vow that you’re not going to dig yourself into a deeper debt hole this holiday season. And you know what? It’s even possible to come out in better financial shape after the holidays if you stick to a few strategies.
Decide to Make Your Own Rules
Be bold and take back the holidays. You don’t have to do things the same way year after year. Change things up and focus on experiences rather than extravagant gifts. You might be surprised to encounter relatives who will love this idea.
And if they don’t love it? Well, do it anyway. Your goal is to survive the season, not to get into someone’s will.
Create your gift list and decide how much you can spend on each individual. If you have kids, put their needs first. For the rest, try something radical. For large extended families, suggest a Secret Santa get-together. If you don’t have any cash flow for the holidays at all, give the gift of time.
For your mom, bring dinner one night and spend the evening with her. Offer an evening of babysitting if you have a brother or a sister who has kids and needs a night on the town.
Another fun thing to try is giving out IOUs. For example, you can create a simple invitation on your computer. You can invite the recipient to a shoe shopping trip, a mani/pedi, or maybe a ticket to a sporting event if you can get access to cheap tickets through work or via your credit card’s rewards program.
Roll the invitation like a scroll and tie it up with a gold sparkly ribbon (or any color left over from last Christmas). Yes, I’ve done this before, and it was a big hit.
By the way, this also works if you have something in layaway. You can use this scroll technique to let your kid or spouse know what’s coming in February. It’s not ideal, but your kid might actually enjoy the anticipation.
And remember, just because you’ve always had steak and lobster for eight every Christmas Eve, it doesn’t mean you have to do that this year. Make this year less expensive and tell the relatives the lobster will be back in 2019. Or maybe 2020, depending on how your quickly you can get out of debt.
Stick With Discount Stores
If you’re willing to go out early in the morning when holiday sales are advertised, you’ll get first crack at the merchandise. You also might find unadvertised items that could be a cheaper substitute for something on your list.
You can get early access on deals with the REDcard credit card from Target, for example, which gives you 5 percent off when you shop in the store or online. A big warning here: Use this card only if you have the cash flow to pay it off when the bill comes. This card has a 24.9 percent annual percentage rate, and you’ll be further in debt if you carry a balance.
Check Out Drugstores
You’d be surprised by the unique and inexpensive gifts you can find at drugstores. I’ll make a confession here. Last year, I waited until the last minute to finish my list, and I ended up at Walgreens because it was near my house.
I found heated scarves for $6, fuzzy socks for a dollar, denim leggings for around $17 and cute stocking stuffers that were dirt cheap. And one more plus: Since you didn’t have to cover a store the size of two football fields, you won’t end up exhausted by the end of your shopping trip.
Use Your Credit Card Rewards
Review your rewards accounts for all of your credit cards and store rewards cards. Pay for your gifts with points. You can redeem them for gift cards or merchandise, or use them on Amazon if your credit card is eligible for Amazon’s Shop with Points program.
One more tip: If you have a credit card with grocery rewards, use that card to buy gift cards at the grocery store. You’ll earn rewards for buying holiday gifts that you can later redeem for a statement credit.
Get a Credit Card With a Zero Percent APR on Purchases
If your debt is due to a temporary situation, such as recent unemployment or an illness, and you’re actively paying down debt now, then this strategy can help you get through the next few months while you catch up on bills.
A credit card with a zero percent introductory APR on purchases allows you to make monthly payments on holiday expenses without paying interest during the intro period. Right now, I’m seeing intro periods ranging from 12 to 20 months.
This approach requires self-discipline. Your goal is to make it through the holidays and pay this off when your cash flow increases. Use this card only for holiday expenses and make on-time monthly payments or you could lose the intro rate.
Get a Balance Transfer Credit Card in January
If you still have good credit, consider getting a balance transfer credit card with a zero percent introductory APR in January. You can pay down your debt and pay zero interest for a period of time. There are usually great offers in January because many consumers have overspent during the holidays.
If you don’t qualify, look into other options that might reduce your interest rates, such as a debt consolidation loan. If you’re really deep in debt, don’t wait too long to talk to a credit counselor. You can find one via the National Foundation for Credit Counseling.