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How to Avoid the Holiday Credit Hangover

The frenzy of the holidays can reach fever pitch in the last few days of the year. Whether it’s the crush of confused travelers in an airport security line or some surprise last-minute shopping at – gasp – the mall, holiday time can make anyone’s blood pressure spike. However, there usually comes a moment where you can finally exhale a big sigh, knowing that you managed and survived the sometimes frantic moments of the season. But did your credit pay the price?

Fighting the holiday credit hangover can be a challenge, especially if you used credit to cover some of the unexpected expenses the holidays always seem to bring: exploding ovens or garage doors that give up the ghost never seem to strike at a helpful time, but they can really stretch your credit use in the lead-up to holiday celebrating. If you’re dreading taking a look at your credit this month, consider some options to spend for the holidays differently next time around, and fight a credit crunch in the months to come.

  • Commit to more than the minimum

    If you’re surprised (or shocked) to see a credit use spike over the holidays, consider working to pay it down quickly so that you can avoid paying interest extended over several months dragging into the year. It might mean a bit of sacrifice in the early months to do it, but paying down debt quickly helps you put it in the past faster. Holiday overspending may have crept in, but you can resolve to pay it down and not make the same mistakes again.

  • Revise your holiday budget

    If you set a budget for your holiday spending – or if you had no budget for spending at all – and you found it didn’t include everything you put on the plastic, take the time to figure out where you went off-route. Some of those expenses might be one-time events, but for others that could recur (like a gift card for a new co-worker, or a host gift for the friend who hosted a holiday bash), build them into your plan for next year to avoid surprises where you can. Once your budget includes everything you’ll need to think about, you can start making strategic decisions about what stays or goes. But that’s impossible to do wisely if you haven’t mapped where you spent this year.

  • Kick off your emergency fund savings

    If you were the one arguing with the repairman or forced to haggle with an appliance clerk about whether or not hoses are included over the din of pop Christmas carols, then it may be time to give yourself some breathing room in your budget. Dedicating a little cash early on in the year to get your emergency fund growing can help ease the pain that unexpected needs can bring. It’s even easier to save when your accounts let you automate the saving, so it can happen consistently in the background.

The holidays don’t have to make your wallet tremble. Just know that if your spending plans got derailed a bit, you can get things back on track early and plan to spend smarter next time.

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