How to avoid a January credit card hangover

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The silly season has arrived and with it comes a myriad of possible opportunities to spend money. But, if you follow our advice, you can put strategies in place now to ensure that you don't wake up in January with a credit card hangover!
 
Between all of the Christmas parties, gifts, food and travelling to see loved ones, Christmas can be an expensive time of year – and it can be tempting to pop extra expenses on your credit card.
 
But the debt hangover you’ll experience in January when you receive your statement in the mail will require more than an aspirin to clear!
 
To ensure that you celebrate the silly season in style without blowing your budget, try following these tips:
 
1. Pay with cash
Allocate yourself a “spending budget” from your pay packet and withdraw that entire amount in cash. Then, remove your credit card from your wallet and pay cash for everything. When you pay by credit card, you often don’t think too much about the cost. But when you physically hand over currency for goods or services, you immediately experience the repercussions of your purchase – ie, less money in your wallet – which makes you consider what you’re buying more carefully.
 
2. Follow Santa’s lead…
By making a list and checking it twice! Have you ever wandered into a grocery store with a specific purpose, and then walked out an hour later with four bags full of items you never intended on buying? Before you hit the shops, make a list, and then resist the urge to add impulse buys unless you really need them.
 
3. Lower the temptation to spend
Do you have a high credit card limit, or an extra credit card that you keep just in case of “emergencies”? Consider chopping your credit limits right down to the bare minimum so you can avoid the temptation to make charges on your card: after all, if you don’t have it, you can’t spend it.
 
4. Avoid store cards
Many department stores offer interest-free promotions if you sign up for one of their store cards. It sounds great: you can do all of your Christmas shopping at once under a “buy now, pay later” scheme, and no interest is payable for six months! The catch, however, is that store cards typically have much higher interest rates than standard credit cards once the interest-free period comes to an end. These rates can be as high as 30%, so if you don’t think you’ll be able to repay the entire balance before the interest-free period ends, then don’t go there in the first place.
 
5. Get creative
Do you have a special skill? You might be a whiz with numbers and great at preparing tax returns, or you may make the best chocolate chip cookies known to man – or, you may be able to transform a small courtyard into a robust veggie garden. Tap into your talents and give the gift of time or favours, rather than spending hundreds of dollars on store-bought gifts. Some ideas might include car washes, babysitting, haircuts, home repairs, cooking, baking or gardening.
 

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