10 tips to avoid credit card debt while on vacation

To the surprise of many, credit card debt has actually decreased during the pandemic. Consumers seem to have done a very good job watching their money and making wise choices during this very difficult time.

But now the holidays are upon us, and the urge to spend and give is greatly increased. According to a investigation per the National Retail Foundation, the average shopper will spend $998 during the holidays this year. And a lot of that will be charged on that plastic card that has such a high interest rate.

What can you do to avoid getting into massive debt on your credit card during this wonderful time of year? Here are 10 ideas to avoid increasing your account balance.

1) Start with a firm budget for the vacation. It is not easy to make a precise budget for this moment of donation but it is essential not to go into debt. Start by taking a look at what you spent last year on all of your holiday expenses, including gifts, decorations, travel, Christmas cards, and even stamps. Decide on an amount for 2020.

2) Then make a gift list and stick to it. Decide how much you want to spend on each person and keep your spending as close to that figure as possible. Keep track of your spending so you know if any adjustments need to be made as you delete your listing.

3) The best way to stick to your budget and not fall into the trap of impulse spending is to pay cash. Studies have shown that consumers spend less when paying in cash. This can act as a mild deterrent to overspending.

4) If you have credit card debt before the holidays, you don’t have to charge anything extra to your account. credit card in December. Adding to your existing debt is one of the worst financial decisions you can make. If your card’s APR is 20%, approach a spend of $100 as an actual spend of $120. This might entice you to pay cash.

5) Before making your first vacation purchase, check the credit limit on each credit card you use. By some estimates, nearly a third of credit card consumers have seen their card’s credit limit reduced during the pandemic. If you don’t know your limit has been lowered, you may unknowingly go over your credit limit. This can cause significant issues, including a lower credit score and a much higher APR.

6) Some credit cards have a price protection feature, allowing cardholders to get a refund if the price of an item charged to your card drops for a certain amount of time. So pay attention to the price of the item after purchasing it. You may need to record the purchase online and retain your receipts as proof of purchase.

7) If you intend to carry a balance on your credit card account, it won’t hurt to contact your issuer and ask for a lower interest rate. Any decrease in your APR will save you a good amount of money in the long run.

8) Avoid using those obnoxious and expensive convenience checks that sometimes appear on your credit card statement. These promotional checks look like free money, with 0% offers in bold. They may look good, but there’s usually a 3% or 4% fee for using these checks and they may charge an even higher interest rate.

9) Use rewards points or cash rewards from your card for holiday shopping. These can be used to purchase gift cards from many retailers, sometimes at a great price. Purchasing gifts in this manner will not take money out of your pocket or add additional dollars to your credit card balance.

10) Set expectations for exchanging gifts. Setting expectations with your friends and family members is a great way for each of you to limit your spending. It is increasingly common for family and friends to set an amount for a gift exchange. This helps you stick to your budget.