5 Christmas planning and budgeting tips to cut credit card debt

Christmas credit card debt stalks more than one-third of us into the new year. Here are five simple and practical tips to help you budget this year.

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Simply having a wonderful Christmas time is easier said than done if you’re worried about the cost. For more than one-third of us, Christmas credit card debt stalks us well into the new year. This results in a surge in applications for 0% balance transfer cards, according to credit card provider, Vanquis.

But there’s light on the other side of the Christmas tree this year. The Vanquis survey also reveals lockdown has enabled more of us to reprioritise our spending, and nearly a quarter of those questioned are confident about managing their Christmas finances.  

If you’re not quite feeling the same level of confidence, it’s not too late to start Christmas planning and budgeting. So, here are five simple and practical tips that can help you budget this Christmas and cut new year credit card debt. 


1. Budget for food, gifts and activities

Christmas should be all about having fun. Sadly, budgeting feels like anything but fun. Nevertheless, a Christmas budget is your friend and will have the greatest impact on reducing credit card debt into the new year. 

Calculate what you can afford to spend this Christmas (not what you’d like to). You can then split this figure and set a budget for food, gifts and activities like seeing Father Christmas or the office Secret Santa.

It’s also a good idea to set aside some funds for last-minute trips and surprises so that you don’t feel like you’re missing out on spontaneous drinks or evenings out. 

2. Decide who’s getting presents this year (and how much you’re willing to spend)

Most of us already know who we’re buying presents for, but often, the gift itself and how much we’ll spend is a little vague. Instead of leaving it to the last minute (and panic buying in a hurry), it’s worth planning now what you might like to buy.

It doesn’t have to be set in stone, but fixing a budget per person and giving yourself an inkling about what to buy will mean you’re on high alert for suitable bargains whenever you shop online or on the high street. 

If you’ve got loads of friends or extended family that expect presents, why not suggest putting a limit on what you each spend?

Another way of avoiding credit card debt is to have a go at making some homemade presents for gifts with a difference.

3. Plan parties and gatherings in advance

If you’re hosting friends and family this year, having a plan can help you avoid spending more than you need and cut the risk of running up credit card debt. 

Consider what food you want to serve and clear out some freezer space so you can take advantage of supermarket offers when they crop up. 

Similarly, think about the decorations you already have and whether you really need any more. If you really do need more, it’s worth checking out online marketplaces before you head to the shops. Plus, if you’ve got kids, make the most of them! Mine are quite happy (and quiet) spending a couple of hours making paper chains out of sugar paper in front of the telly. 

4. Hunt out discounts and sales

A deal is only a deal if you need it. Buying stuff ‘because it was in a sale’ isn’t an example of saving money; it’s an example of how retailers successfully get you to spend your cash.

This is where having Christmas gift lists can really help because it keeps you focused on what you actually need to buy and for whom. There will, of course, be times when you go off-list, but having a starting point means you’re less likely to deviate drastically.

To discover the best offers, head tosites like vouchercodes.co.uk and hotUKdeals.com. Plus, don’t forget about Black Friday and Cyber Monday


5. Use credit wisely to avoid building up credit card debt

Credit cards are undoubtedly very useful, particularly at Christmas time. But the key is to keep spending in check, which should be a natural side effect of planning ahead and budgeting this Christmas. 

But if you’re concerned that your credit card bill is already starting to climb, consider switching to a 0% balance transfer card sooner rather than later. Alternatively, think about a 0% purchase credit card instead. 

Most of us naturally spend more at Christmas, but it doesn’t have to become an event that spirals out of control financially. 

So, grab a pen and paper, settle down with a cup of tea, and start Christmas planning and budgeting now. It really can help save on credit card debt and enable you to look forward to the new year without the ghost of Christmas past lurking around. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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