In Your Debt: 4 Ways to Limit Your Vacation Debt

There’s a magical feeling in the air this time of year, but that magic costs money. Each year, the pressure grows to spend more to create a perfect vacation.

This expensive season can leave you with debts that linger. According to NerdWallet’s 2022 Holiday Shopping Report31% of US holiday shoppers in 2021 who used a credit card to pay for gifts still haven’t paid off their balance.

With some planning, you may be able to avoid holiday debt. But if you go over budget and carry some credit card balances, there are ways to limit the damage to your finances.


Start with your budget and gift list, along with a shopping list if you’re hosting parties. Shopping apps and web browser extensions can make it easier to follow price trends, compare prices across merchants, find coupon codes, and earn cash back.

Shopping online can make it easier to overspend because of the convenience and improved user experiences on merchant websites.

“All these different companies are trying to create the fastest, most hassle-free way to buy things,” said Emily Rassam, senior financial planner at Archer Investment Management in Charlotte, North Carolina. Rassam curbs the shopping urge by adding items to her cart as soon as she sees them, but only reviewing what’s in the cart once a month and making a final purchase decision. A little extra time between finding items and sitting down to buy them can lead you to second-guess your choices and then remove a few items from the cart.


Don’t forget the smaller details that add up, like decorations and wrapping paper. Reuse what you can – anyone who keeps old gift bags in a closet, now is your time to shine. Rassam recommends looking for big discounts on these items right after the holiday season ends.

Hosting parties and hungry houseguests is also now more expensive. According to the Bureau of Labor Statistics, the cost of food at home increased 12.4% between October 2021 and October 2022.

Beth Moncel, the founder of Budget Bytes, an online resource for learning how to cook on a budget, suggests sticking to a simple holiday menu that you can make on the cheap. “Classic recipes are simple, don’t require fancy ingredients, and are still delicious. Especially if you add an extra knob of butter to it,” Moncel said in an email. “A little extra butter is an easy and budget-friendly way to make any recipe a little better!”


If you get into holiday debt, add paying it to your list of New Year’s resolutions. There are a few actions you can take to stay motivated:

— REDUCE INTEREST PAYMENTS: Consolidate high-interest debt with a balance transfer credit card or personal loan. However, keep in mind that while these products can help you spend less interest (depending on the terms you qualify for), they don’t address the reasons why you got into debt in the first place. They may just be useful if you’re trying to pay it off.

— TRIM COSTS AND ATTACH DEBT: Start the new year by reviewing recent credit card and bank statements to see where you might be able to cut back. Any savings you make this way can be used for credit card payments. If you received cash gifts or holiday bonuses at work, use this money to pay off debt.

— GET HELP: Financial professionals and not-for-profit credit agencies can help you see your full financial picture so you can take action. Solving money problems on your own can be difficult, but unbiased advice can make it easier to get started.


Heath Carelock, program director of the Financial Empowerment Center at Prince George’s Community College in Largo, Maryland, cites his mother-in-law’s dedication to year-round vacation planning as a way to avoid debt. “She starts saving for the holidays from New Year’s Day. She tries to buy all her Christmas presents in August.

Carelock suggests customers take advantage of holiday sales year-round. If you know a sale is approaching, he says, wait until then to make a purchase.

Spreading out your vacation spending gives you more time to compare, find deals, and avoid paying a bunch of credit card fees quickly. “It burns slowly rather than a conflagration,” says Carelock.


This column was provided to The Associated Press by the personal finance website NerdWallet. Sara Rathner is a writer at NerdWallet. Email: [email protected] Twitter: @SaraKRathner.


NerdWallet: 2022 Holiday Shopping Report


This survey was conducted online in the United States by The Harris Poll on behalf of NerdWallet September 15-19, 2022, of 2,075 U.S. adults ages 18 and older, 1,751 of whom plan to buy gifts this holiday season (referred to in this document). referred). report as “holiday shoppers”). The sample accuracy of Harris online polls is measured using a Bayesian credible interval. For this study, the sample data is accurate to +/- 2.8 percentage points with a confidence level of 95%.

Bureau of Labor Statistics: Consumer Price Index Summary

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