How to avoid credit card debt this Christmas

Christmas shoppingFor many people Christmas is a time to give generously to friends and family, but if you haven't been saving throughout the year it can be easy to rely on credit cards and overspend; leaving you with a big bill come January. Thankfully, you still have a few months until Christmas so there's time to get your gifts without going broke.

While you'd be better off if you started saving in March, Spend On Life has pulled together 10 ways to avoid Christmas credit card debt, which it estimates will net you $750 toward Christmas gifts in the next two-and-a-half months.
Spend On Life's first 3 steps revolve around cutting back on food, coffees and pampering, which they estimate can save you close to $500. Cutting back is a great place to start and thanks to the intelligent tagging in personal finance apps like Quicken Online and Wesabe, you can identify how much you spend in each of these categories and prioritize your cutbacks. These tools also make it easy to look for subscriptions that you can trim for the holidays.

For example, if you drop your Netflix plan down to 1 disc out and rely on streaming to watch movies you can save about $40 by Christmas,and if you stop your two-at-a-time GameFly subscription you can save between $20 and $60. One word of caution about cutting back is to do it realistically; if you cut too deep you're much more likely to splurge after a month and a half of living super frugal.

Two more great ways to save money on Christmas gifts from Spend On Life include giving as a group and using a gift giving game. Giving as a group is experiencing a surge in popularity in the recent years and now companies that sell high priced items are making it easier to do. Best Buy, for example, offers a "Pitch In" Gift card service (Launching next week) that lets family members and friends pool resource to fill up a gift card without shuffling money around or planning out amounts.

Technology has also made setting up a gift giving game like Secret Santa super simple. provides a handy getting-started guide that lets you invite others to take part in the exchange and then keeps identities a secret when it informs the secret Santa's about their gift recipients.

Spend On Life included my No. 1 tip for buying Christmas presents, bargain hunting, to their list. While some people may look down on shopping from the clearance rack for gifts, let me assure you that there's no shame in saving big when giving gifts; especially since the clearance stickers peel right off!

Don't be fooled into thinking that the best sales will come after the holidays. I've already finished one person on my list by picking up a clearance item at Hallmark and a Hannah Montana Mall Madness game for 75% off at a local game store that just moved in for the holidays. So come Christmas I'm going to look mighty generous, but the $75 worth of gifts only cost me $14!

Other great ways to save on gifts include looking for coupon codes that can easily save you 5-30% on gifts! If your recipient isn't on Twitter, it's another resource for finding deals on gifts. You may see good deals from your followers, like a Wii with a $25 gift card, or you can ask your followers where to buy something to get the lowest price.

You should also learn when it is the best time to buy. Checking out our Black Friday 2009 predictions will give you an idea of how low many items like GPS units, laptops and MP3 players will go and you'll learn when it is the best time to buy an HDTV.

With these tips, and the rest at Spend On Life, it's easy to stay under budget and avoid having a "Credit Card Christmas" this year. While Christmas shopping is fresh in your mind create your own Christmas Club savings account at a bank like HSBC or ING. Not only will you enjoy decent interest rates but you can have a small portion of your paycheck put in each month via direct deposit ,and come this time next year you won't have to worry about where gift money will come from.
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