Holiday credit card payments are tough on most people simply because we tend to spend a lot more than usual during the holiday season. One-third of Americans will spend more than $500 on holiday items this year, according to WalletHub’s 2017 Holiday Shopping Survey. And 1 in 7 people don’t expect to fully repay holiday credit card balances until after Valentine’s Day. But there are several ways to ensure you make your holiday credit card payments on time and pay as little as possible in interest.
Here’s how to afford your holiday credit card payments:
Make a plan. Making a holiday budget will focus your shopping and help you avoid splurging while you’re at it. With a sense of the total amount you’re comfortable spending, you’ll be able to allocate a portion to each person you’re buying a present for and then shop for gifts in that range. Ideally, you shouldn’t spend more than you can afford to repay by the due date. But even if you’re comfortable having a bit of a new-year balance, setting a limit for yourself is important. Otherwise, you might be taken with the spirit of the season and find yourself with a very costly New Year’s surprise. You can check out your ideal holiday budget on WalletHub, personalized based on your financial situation.
Consider 0% cards, but not deferred interest: Store financing often comes with a trick called deferred interest. It means you’ll get a low, perhaps even 0%, rate to start. But if you pay even one monthly bill even one day late or leave a balance of as little as a penny unpaid at the end of the promotional financing period, a high interest rate will retroactively apply to your original purchase amount. It would be like the low promo rate never existed. So you want to avoid such “deals.” On the contrary, 0% credit cards with a Visa, Mastercard, American Express or Discover logo can help you save a bundle safely. The average 0% card gives you nearly 10 months before interest kicks in. The best cards give you more than twice as long. And interest only applies to whatever balance is remaining when the 0% period ends.
Cut back on some luxuries. December is the month for giving. So why not give up a few things to give yourself a less stressful holiday season? We all have some expenses that don’t provide nearly enough joy for the money. So find and cut some of yours to free yourself from fear of post-holiday debt.
Don’t skip a payment. It’s possible your credit card company could offer you the opportunity to not make a December payment. This wouldn’t hurt your credit history, but you still might accrue interest on your balance. And you’d have to budget carefully because the next bill would be twice as big.
Take advantage of deals and rewards. Many credit card companies have holiday promotions for existing cardholders, which allow you to save on certain types of purchases. And if you’re in the market for a new credit card, several offer initial rewards bonuses worth hundreds of dollars to new cardholders who spend a few thousand dollars within a few months of opening an account.
It’s also important to note that if the due date for your credit card payment falls on a Federal holiday, the payment must be submitted by the cut-off time on the next business day. It’s better to pay early, though, so you don’t end up accidentally owing a late fee. And here’s one more parting tip: If you know you tend to spend big during the holidays, set aside a little of your paycheck throughout the year and use that amount as a guide for how much you can afford. It’ll be a lot easier than trying to get all the money together during December and January.
You may be able to get the chance to skip a payment if you call your issuer, given you have a good payment history already. Just call your them @ the number on the back of your card and see how that works out. Good luck!
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.