Scale back holiday spending if credit card debt grows too high

It's easy to get swept up in the gift-giving spirit at this time of year. During the holidays, even the most cost-conscious consumers can see their credit card debt quickly spiral out of control.

A number of polls show that consumers, who in general are feeling better about their current finances than in the past, are likely to spend more money this holiday season than they did last year, and unless they're careful, that could result in significant credit card debt, according to a report in the Bellingham Herald.

There are a number of ways consumers are avoiding additional credit card debt this holiday season, the report said. One popular method is to simply use alternative payment options, such as debit cards, cash and even prepaid cards. While this does not allow for the type of financial flexibility a credit card might – the amount of money you have is all you can spend – it can save considerable cash in the long run because the cardholder won't have to deal with interest payments.

Other consumers are becoming more frugal in making their purchases, the report said. Some are putting together thoughtful presents, such as gift baskets, and paying far less to do so than if they had bought the hottest toy or gadget. Many are also doing more comparison shopping, checking retailer fliers, online promotions and other ways to ensure they're getting the lowest price possible on the gifts they want to buy.

Another popular method for saving money, or at least ensuring consumers don't spend more than they want to, is to make a budget before heading to the mall or other retailers, the report said. Doing so, and keeping the total amount one wants to spend in mind, can help limit overspending and keep any credit card debt incurred to a reasonable level. Some consumers are even leaving their credit cards at home when they go holiday shopping to ensure they spend only what they plan for.

Many consumers have sworn off credit card debt recently, with some even closing all their accounts. Others have simply relied less on these pieces of plastic to make their everyday purchases while at the same time increasing the amount of their monthly payments to more quickly lower existing balances.