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Holiday Spending and Managing Debt

We sat down with Ross Jones, Vice President of Consumer Loans at CAMPUS USA Credit Union, to talk about holiday spending and managing debt. Check out some of his tips and insights to keep in mind while you’re swiping your card this holiday season.   

Why do so many people accrue debt during the holidays?

The simplest answer….. it’s The Holidays! We’re toward the end of a long year. Who doesn’t want to spend a little extra on the kids or get that nice gift you’ve been saving for? We are human after all!

The more formal answer……..Consumerism. With the increased advertising opportunities big companies use to reach the consumers – including organic audiences through social media – combined with the “consumer mindset," people are driven to buy as much as possible. Myself, included!

Each year I struggle with this just as much as anybody else; BUT without a plan and set budget for gift buying during the holiday season, it is very easy to get carried away. The purchases can add up very quickly! Some years I do better than others. I bet you can relate!


How can someone prioritize which debts to pay off first? For example, if I have two credit cards, which should be my priority?

Most experts will tell you to pay off your unsecured debt first, specifically, the debt with the highest interest rate. In the past, I have also advised members to pay off some smaller balances in the beginning to help get the momentum going. Not to mention, having fewer accounts to worry about can be easier to manage.


Is paying off that debt ASAP the best way to eliminate it, or if it is a larger amount, are other tactics better? (ex. balance transfer to a 0% interest credit card, finding an additional stream of income, etc.)

The best approach is to tackle unsecured revolving debt first – these accounts can have a great impact on your credit score if you are close to your credit limit or are carrying the debt from month-to-month.

We often suggest converting revolving debt into a debt consolidation loan, if possible. Debt consolidation loans can be very helpful in paying off debt faster along with helping a borrower’s credit rating. Installment loans help your credit more than revolving debt (credit cards and lines of credit), often offers a lower interest rate, and has a set number of payments until the debt is paid in full. One important aspect of this topic – you must use discipline and trust me, I know it can be hard! If you convert your revolving debt to an installment loan, you must be careful to not run up the credit cards quickly again. If you do, you’ll be left with twice the debt!


What are some of the best categories to cut spending when trying to direct more income toward paying down debt?

Discretionary spending - eating out at restaurants, specialty coffee drinks, and services you can do yourself (lawn maintenance, nail salons, shopping apps like Shipt, etc.). These services can be great. However, I’d highly recommend tracking how much you’re spending in these categories for 30 days. I did this with my family and was shocked at how much of my paycheck was going toward these things, eating out especially! We set a target of no more than 4% of our income at restaurants in a month and it has made a huge difference. Sit down and set targets for your budget. Stick to those targets. You’ll notice your budget loosening right away!

Let me also be clear – I’m also not suggesting you don’t enjoy life a bit. We all need to! Who doesn’t love going out to dinner on Friday night at your favorite restaurant? My main talking point here is really, “Know where your dollars are going.


How can people plan for the next holiday season to avoid going into any credit card debt, or at least minimal debt, over things like travel or gifts?

Set a goal for the amount of money you plan on spending on your family and friends. Once you have that dollar amount, determine how much you need to save each month to reach your goal. CAMPUS even offers savings club accounts that can help you save for holidays and vacations. Members can setup automatic deposits to make saving even easier!


Happy Holidays from our family to yours! 



By CAMPUS USA at 23 Nov 2018, 14:45 PM

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