6 tips to help you manage your holiday debt

A young man and woman smile while looking into a store window, with holiday lights in the background.Image: A young man and woman smile while looking into a store window, with holiday lights in the background.

In a Nutshell

The holidays may be a magical time of year, but they aren’t cheap. If you're struggling, consider buying gifts with credit card rewards and checking for free shipping deals. Depending on your credit, you may also be able to find a personal loan to help you save money on interest.
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’Tis the season for giving.

Just remember, you’re not Santa Claus. Your heart may be in the right place, but if you spend more than you can afford, you could get stuck with holiday debt long after you’ve taken the decorations down.

Here are a few tips to make sure you don’t break the bank as you spread the joy this time of year.


  1. Take advantage of low- or no-interest intro offers
  2. Look into a holiday loan
  3. Buy gifts with credit card rewards
  4. Score free shipping with your credit card
  5. Check out your credit card’s return policy
  6. Think outside the (gift) box

1. Take advantage of low- or no-interest intro offers

It’s usually a good idea to pay off your credit card bill in full, if possible. But if you think you’ll wrap up the holiday season carrying a balance that you’ll be paying off into next year, you may be able to limit the damage by finding a card with an intro offer for low (or no) interest. Just make sure you can pay it off before the introductory offer period ends, or you’ll be hit with interest charges.

2. Look into a holiday loan

It’s a good idea to avoid racking up debt over the holidays. But if you haven’t had a chance to build up your holiday savings and your credit cards have high interest rates, you may want to look into taking out a personal loan for the holidays.

Depending on your credit, you may be able to find a personal loan with a lower interest rate than the credit cards already in your wallet.

3. Buy gifts with credit card rewards

Don’t let your credit card rewards go to waste. Some cash back credit cards will allow you to redeem your rewards for a variety of gift card options.

4. Score free shipping with your credit card

There’s no point in using up your holiday budget on expensive shipping costs if you don’t have to.

Not when websites like Amazon will ship your gifts for free, and in as little as two days if you’re a Prime member. American Express® cardholders may also sign up for a complimentary ShopRunner membership, which includes free two-day shipping on eligible items at participating retailer’s online stores.

5. Check out your credit card’s return policy

It’s hard to please everyone.

That’s why it pays to know the holiday return policy, just in case the gift you buy falls flat. If the store refuses to accept the return, some credit cards may refund you a portion of the money you spent on the purchase with the card. Limitations apply, so check with your card issuer for details. If you order online, websites like PayPal and Amazon may even cover the cost of return shipping.

6. Think outside the (gift) box

A little money can go a long way.

Make the gifts yourself

If you can’t afford the most popular toys for your kids, consider adding a personal touch to your holiday shopping list by making the gifts yourself.

My family does this every Christmas. One year, my mom and sister knit a blanket for me, and another time they filled an ornament with clippings from old newspaper articles I’d written. Those gifts are way more sentimental than unwrapping the latest iPhone.

Host a white elephant party

White elephant parties are great for those on a tight budget. You only need to purchase one gift, and the price is typically capped at $20.

Celebrate after the holidays

Make it a tradition.

Whichever holidays you celebrate, if you get together with your family on Boxing Day (the day after Christmas) or even later, you could save a fortune. Not only will airfare be cheaper, but you might score a steep discount on belated holiday gifts that other shoppers returned to the store.


Bottom line

We know it’s easy to splurge this time of year. But if you spend more than you can afford, you could wind up paying it back long after the holiday season ends.

Remember, it’s never too early to start saving for next year. The longer you save, the less likely you’ll need to rely on credit cards or loans to get through the holidays.


About the author: Tim Devaney is a personal finance writer and credit card expert at Credit Karma. He’s a longtime journalist who prides himself on being a good storyteller who can explain complex information in an easily digestible wa… Read more.