How Not to Ruin Your Credit During the Holidays

By Jackie Lam, AFC®
Published on: 11/22/2022

Ah, the holidays. While it's the season that sparks feelings of merriment, togetherness, it's a good idea to be watchful of your finances. For one, holiday debt is a real deal. Per a fall 2022 survey by U.S. News and World Report, 4 in 10 survey participants anticipate going into debt this holiday season.[1]

The good news is there are simple ways you can stay on top of your finances, spending and credit during the end of year. Here's how to prevent the ugly Holiday Debt Monster from rearing its ugly head this new year, and finding a middle ground between staying within your budget, keeping an eye on your credit, and creating special experiences for you and your family.

Set a holiday budget

According to a recent holiday retail report by Deloitte, the average spending per shopper this holiday season is $1,455 per person. Plus, 37% of American households say they're worse off financially than last year.[2] To manage the squeeze of holiday spending plus any money stress you might be feeling, jot down your expenses.

Setting a budget for holiday-related spending is like creating guideposts to prevent you from veering off track moneywise. To start, create a list of all expenses this season. Include everything you can think of, and no expense is too small. Your holiday budget might look like:

  • Travel to visit family
  • Festive attire
  • Gifts (create a list and price range you can spend per person)
  • Greeting cards, gift wrap, shipping costs

The key is not just to simply create a list of holiday-related expenses, but to figure out how much you'll need for each type of expense. Get specific as possible. If you can't put an exact number to an item in your budget, poke around the internet and do research to help you narrow down costs, or put down a range.

Next, how do you expect to shore up funds to cover these costs? For instance, will you tap into your savings, pick up extra side hustles, or put some of it on a credit card? Some simple math and realistic expectations on what you anticipate spending and what you have to spend can help keep you in check.

Track your spending — and make adjustments as needed

Just like how in relationships it's one thing to set boundaries and another to uphold and enforce them, keeping tabs on your spending helps enforce your holiday budget.

The beauty of our modern money age is that there's no shortage of ways to track your spending. For instance, check your balance and transactions on your bank mobile app regularly, or sign up for a free money management app that helps you see where your money is going.

Find yourself spending more than you can afford? Make tweaks along the way. For instance, you can consolidate gifts (aka buy a single gift for an entire family versus individual presents) or nix presents altogether.

Consider a White Elephant or Secret Santa exchange. That way you cut down the gift-giving to one present. Another money-saving tactic is to go the do-it-yourself route and make gifts instead of buying them.

Shop online and look for deals

Shopping online not only can help you save on gas and hassle, but in some ways it can help you save. For instance, installing a free shopping browser extension that helps you spot the best deals online, and alerts you in price dips. Buy items on sale, and scour the internet for promo codes and discounts.

The other side of online shopping is that it can lure you to spend more. To curb your spending, refer to your budget and set limits. Check the grand total at checkout, and see if reaching the spending minimum to hit free shipping is worth the added buys. If not, consider choosing a few online retailers to do the majority of your shopping. Don't forget to track your spending along the way.

Make the most of your rewards

To stave off a case of holiday debt blues, it's the time of year to cash in on your store loyalty points, credit card rewards points, and promos you can swoop in on during the holidays.

Take stock of how many points and rewards you have. Next, create a game plan to use your rewards to bring down your spending. Case in point: You can use credit card rewards toward a flight to see your family over the holidays, and redeem the remaining points for gift cards as stocking stuffers.

Pay off your card as you make purchases

If you're using your credit card to make purchases over the holidays, try to pay off the balance in full each month. It's totally understandable that you might have to tap into your credit card to stave off higher prices all around due to inflation, but to keep your credit in tip-top shape, don't carry a balance if possible. This is all the more feasible if you keep a low balance — so stick to that holiday budget.

You can monitor your credit card spending by setting alerts through your credit card issuer's mobile app, or logging in and making it a habit to review what you put on your card. Remember: during spend-heavy times of year like the holidays, it can be easy to rack up a high balance on your card. But the road to paying it off can be a long one.

Think twice about Buy Now, Pay Later plans

You'll also want to be careful about Buy Now, Pay Later (BNPL) options. While it's a short-term solution to affording holiday purchases that are out of your reach budget-wise, that's a form of debt you're on the hook for. If you opt for BNPL on several items, your debt load will multiply. Plus, you'll be juggling a bunch of different payment plans at once, which can add to your money stress.

Otherwise, you might run the risk of being delinquent on one of your payment plans. If that particular BNPL company reports to the credit bureaus, guess what? Your credit score could take a hit.

Monitor your credit during the holidays

Along the same lines, keep careful tabs of your credit during the holidays. For one, all that online shopping and increased credit card usage also means a greater chance of credit card fraud. In fact, a report by Experian reveals that in 2020, nearly 1 in 4 consumers said they fell victim to fraud.[3] While fraud — if detected and reported — typically doesn't harm your credit, if it goes unnoticed and the charge is unpaid, it could hurt your credit.

You'll also want to see what financial behaviors and spending habits impact your credit — for better or for worse. Signing up for a free credit monitoring service, such as Self's credit monitoring service, which is free for Self customers, will keep you on high alert.

While you don't want to be a Scrooge McDuck, you also aren't quite in a financial place to flash cash like Daddy Warbucks — nor would you want to spend frivolously anyway.

By minding these simple tips, you can avoid not ruining your credit during the holidays. Plus, you can strike a balance between having fun and being prudent.


  1. U.S. News and World Report. "Survey: Nearly 42% Expect to Go Into Debt to Pay for the Holidays."
  2. Deloitte Insights. "2022 Deloitte Holiday Retail Survey."
  3. Experian. "1 in 4 Americans Report Falling Victim to Fraud During the Holidays."

About the Author

A personal finance writer for over 8 years, Jackie Lam covers money management, lending, insurance, investing, and banking, and personal stories. An AFC® accredited financial coach, she is passionate about helping freelance creatives design money systems on irregular income, gain greater awareness of their money narratives, and overcome mental and emotional blocks.

Her work has appeared in publications such as Bankrate, Time's NextAdvisor, CNET, Forbes,, and BuzzFeed. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award, and a two-time Plutus Awards nominee for Best Freelancer in Personal Finance Media. She lives in Los Angeles where she spends her free time swimming, drumming, and daydreaming about stickers.

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Written on November 22, 2022
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