4 Tips To Prevent Holiday Debt During The Recession

Chances are, you’re already making your holiday shopping list (and checking it twice!). After all, Christmas will be here before you know it.

Gift-giving is a lot of fun, but shopping for presents…not so much, especially if it leaves you with more credit card debt when the holidays are over. Throw in travel, decorations, and other expenses in the mix, and you might find yourself with a bigger balance than you wanted. 

No one likes being in debt. But particularly during the pandemic, debt avoidance is even more critical because your financial situation could change at any time. While we’re all hoping that next year will be better, it’s still best to practice responsible holiday spending now. 

These tips from the Motley Fool can help you get through the next few months without coming out on the other side with a mountain of credit card debt.

1. Book Your Flights Early

Because the coronavirus pandemic is still well underway, many people are apprehensive about traveling this year, and for good reason. But if you still intend to travel, it’s best to reserve your flight, hotel, or other accommodations as soon as possible so you can avoid holiday price listings. Booking early also ensures you get the flight and rooms for your travel plans.

2. Save For Gifts And Miscellaneous Costs Early

Like so many other things this year, this holiday season will likely have a few changes because of the virus. Your office may not have its annual holiday party, you might not need to buy new outfits for your children’s’ school holiday performance, or may you won’t be able to make the rounds when visiting loved ones.  

Whatever changes you experience this season, some could benefit your budget and your wallet. However, it would be best for both if you plan for predicted expenses and start saving early. It would help to review holiday spending from previous years to have a better idea of how much you may need. By saving a couple of hundred dollars per month now (or whatever amount you need), you can avoid stressing and scrambling in December.

To help your saving efforts, think of any area you are saving more because of the virus. For example, if you work from home and spend less on gas every month as a result, consider putting the money you would spend and put that toward your holiday savings. 

3. Look For Early Promotions And Sales

Planning for holiday shopping and expenses doesn’t just help you save money, but it can also save you stress. While most consumers hold off on holiday shopping until Black Friday, you would be surprised at the number of products that go on sale beforehand. That’s because, more often than not, items are usually cheaper than they are before Black Friday. So, make your list early and write a few ideas for each person on it. Then you can look for these gifts online and compare prices to find the best deal. 

One little-known tip is that a few ecommerce shops reduce the prices of goods you save in your shopping cart if they happen to drop before you complete the transaction. As you pick your loved ones’ presents, keep them in your cart and track it to catch changes in the total during the upcoming days and weeks. For example, if you save a $45 product on October 20 and notice it’s fallen to $25 two weeks later, you’ll know it’s time to seal the deal.

As the recession continues and the likelihood that lawmakers will send more stimulus your way any time soon dwindles, avoiding debt is more crucial than ever — regardless if you haven’t experienced a disruption to your income or job. Exiting the holiday season free from extra debt is one of the best ways to kick off 2021 and an even better way to lower your stress. 

4. Pad Your Wallet With Cash Back

Using cashback credit cards for your holiday shopping (or regular purchases) is a great way to help you cut costs and save more money. There are tons of cashback credit cards to choose from, depending on your credit score. Just make sure to shop around for a card with the best offers and rates for your needs.

The Ascent, a service from The Motley Fool, offers their tips for the best cashback credit cards this month:


  • Discover it Cash Back: Best for bonus category cashback
  • Blue Cash Preferred Card from American Express: Best for purchases from US supermarkets and gas stations
  • Citi Diamond Preferred Card: Best for balance transfers and 0% intro APR for everyday shopping
  • Citi Double Cash Card – 18-month BT offer: Best for balance transfers and cashback rewards
  • Chase Freedom Unlimited: Best unlimited cashback deal
  • Chase Sapphire Preferred Card: Best travel sign up bonus 


  • Backman, Maurie. “3 Steps You Can Take Now to Avoid Holiday Debt During the Pandemic.” The Ascent, The Ascent, 19 Oct. 2020, www.fool.com/the-ascent/credit-cards/articles/3-steps-you-can-take-now-avoid-holiday-debt-during-pandemic/.
  • Frankel, Matt. “Best Credit Cards of October 2020: Reviews, Offers & Perks.” The Ascent, 9 Oct. 2020, www.fool.com/the-ascent/credit-cards/?utm_campaign=ccrelatedarticles.