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How to Shop for the Holidays When You Have Bad Credit

David Andrew 12/7/16

The holiday season is coming up fast, which is usually a joyful time of year.

However, if you have a bad credit score, the holidays can be extremely stressful. It can seem like you are forced to choose between buying the gifts you want for others and fixing your bad credit.

With a little planning and some discipline, you can still achieve both these goals.

1. Determine your gift budget ahead of time.

Before you head to the malls, it is very important to decide on your total gift budget.

Once you start shopping, it is easy to get carried away and spend much more than you can afford. This will be a big setback for repairing your credit score.

Instead, look at the total amount you can afford to spend on all gifts and make a rule to only spend this amount.

It might help to leave your credit cards at home and go shopping only with cash so you make sure to stick to your budget.

2. Take time to find the best deals.

When you are shopping on a budget, you need to make every dollar count. Make sure to do plenty of research for deals so you do not spend any more than you have to on gifts.

Start planning early so you can try to coordinate with store sales. If you wait until the last minute, you will have no choice but to pay the full retail price.

“The Internet makes

it easy to compare prices.”

3. Coordinate with family members.

Times are tough for everyone and your close family members might also be struggling to pay for the holidays. If you work together, you can make life easier for everyone.

For gifts, consider setting a limit for the amount people can spend. This will help you all stick to a budget.

You may also consider assigning one gift to each person, rather than have everyone buy multiple gifts for every family member.

By working with your family members, you can all keep each other more disciplined with your spending and credit management.

4. Keep track of your card payments.

In the rush and excitement of the holidays, it is easy to forget about your monthly bills. While you might be on vacation, your lenders are not.

They are still going to expect the monthly payments on your credit cards to come in on time. Missing your monthly payments is one of the worst moves you can make for your credit score.

To keep your score from getting worse, make sure you are well aware of when these payments are due during the holidays, as this is a time of year when many people forget.

5. Avoid adding more debt.

Finally, while you are shopping for the holidays, avoid adding more debt. It is going to be very tempting to start adding purchases to your cards with the mindset that you can deal with them after the holidays.

Next year will arrive much sooner than you think, and then you will be in an even tougher financial position, especially since maxing out your cards hurts your credit score.

Keep your spending under control and you will be in a better financial position next year to spend more.

The holidays are a time to relax, except when it comes to credit management. Use these tips to keep your budget under control so you can still afford a pleasant holiday without damaging your finances.

Photo source: quickloans.com.

About David Andrew
David Andrew is a former New York Life financial adviser, holding Series 6 and Certified Financial Planner credentials from his years with the company. He also holds degrees in economics and finance from McGill University. David is now a well-published finance writer with special expertise in credit cards and auto insurance. In addition to his work on BadCredit.org, his articles have been featured on eHow, Zacks.com, TheNest.com, Chron.com and other popular sites. When he's not keeping up with the latest news in the world of finance, David enjoys playing tennis and golf.
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