The holiday shopping season begins in earnest on Black Friday—and stretches into 2018 with post-Christmas sales. If you’re not careful, this five-week period of holiday cheer can wreck your finances.
Americans accrued an average of $1,003 of holiday debt in 2016, up from $986 in 2015, according to a national survey by MagnifyMoney. And nearly two-thirds of survey respondents said their debt was unexpected; they had not budgeted to take on the extra financial burden.
That doesn’t have to be you this year. While 78.5% of Americans plan to spend the same amount or more money this holiday season, you don’t have to be saddled with expensive debt in the new year, says credit expert Gerri Detweiler, education director for Nav.
Follow these five steps to dodge the holiday debt bullet this season:
1. Make a plan ahead of time
While it’s tempting to spend now and worry later, that’s a surefire way to rack up debt. Instead, make a list now—and check it more than twice.
“Deciding you’re not going to worry about the details until after the holidays can lead to making some not-quite-so-good decisions,” says Detweiler. “The ‘I’ll figure it out later’ mentality—you don’t read the fine print, you don’t keep track of what you spend—is trouble. Then, when later comes, you wish you’d thought about it earlier.”
Start by making a list of all the gifts you need to buy so you’re not blindsided by an unexpected addition later in the season. The list will also help you curb impulse buying. Try to set a realistic budget for your spending. (See also: How To Make a Budget)
Sometimes last-minute presents are inevitable, though, like when you receive an unexpected gift and feel obligated to reciprocate. “Try at the beginning to think through your list, and maybe even stock up on a few extra generic gifts that you’d feel comfortable giving in a pinch. Store gift card minimums are usually $25, but if you think about it in advance, you can buy $15 ones online,” adds Detweiler. (See also: How to Save on Black Friday and Cyber Monday)
2. Keep holiday spending on one or two credit cards
When you spread your spending out over multiple cards, it can be easy to lose track of the total amount you’re spending—or to forget you charged something to a particular card altogether.
“When the bills come after the holidays, you can end up with a very expensive holiday hangover. Instead, stick to one, maybe two, cards to keep track of your balances,” Detweiler says. “If you have a partner and you don’t want them to see what you’ve bought, coordinate which cards you each will use.”
And if you know you will have to carry a balance, figure out which card in your wallet will offer the cheapest rate and best terms to pay it off quickly. (See also: Best Credit Cards for You)
3. Shop for a new credit card
Before the holidays might be the perfect time to shop around for a new credit card, adds Detweiler. “You could look for something with a really low-interest rate, 0% financing or balance transfer, or a new card with a great sign-up bonus,” she says. (See also: Balance Transfer Credit Cards)
Sign-up bonuses typically require you to spend at least $1,000—and sometimes up to $5,000—within the first few months of owning a card. If you know you’re going to be buying a lot of gifts or going on a big holiday trip, it may be the perfect opportunity to quickly earn that bonus. And if you’re traveling over the holidays, sometimes a co-branded airline credit card can save your family a bundle on checked baggage fees.
There are always 0% purchase offers on new cards during this period, which can be an attractive way to finance your holiday spending and pay it off over a period of a few months. But that will only work if you know you will be able to pay off the balance before the introductory 0% period is up. (See also: What You Need To Know About 0% Credit Card Offers)
“Depending on the offer, you will most likely have a very expensive interest rate once the introductory period is up, which could end up costing you a lot more money,” says Detweiler. She suggests figuring out the holiday spending balance, dividing it by the number of months of the introductory period, and setting up automatic payments for that amount until it’s paid off. You should also ice the card during that period and not add any new charges.
Store credit cards could also save you some money when you’re buying all those gifts—many offer an attractive discount. These cards can help you save money—and stick to your budget—but opening a new account will probably impact your credit score, Detweiler notes.
“The big danger with opening a new retail card is that it could slip your mind because it’s not in your normal rotation. You could end up missing a payment and have to pay a late fee and interest charges, which would take away the benefit of the discount,” she says. “And those cards almost always come with interest rates north of 20%, so they are definitely not a cheap way to borrow if you need to make a purchase over time.”
4. Use reward balances to buy gifts
Spend a few minutes going through all your credit cards and airline miles rewards points, says Detweiler.
“Look for cards where you might have small point balances. Maybe you have one that doesn’t have a lot of points—certainly not enough for a hotel reward or something else big. You could cash them in for gift cards,” she suggests, or other small gifts that might come in handy for friends, co-workers or other people in your life.
5. Keep track of your spending
Because your holiday spending is out of the ordinary, it can be easy to forget how much you’re spending. Detweiler suggests using an app like Mint.com to track your credit card expenses, but don’t forget your cash purchases, either.
Keep a list on your phone or in an old-fashioned notebook so you know how much money you’re putting toward holiday gifts. (See also: It’s the Most Wonderful Time of the Year… for Criminals, Cheats and Scammers)