Using Credit to Make the Holidays Special for Family

The holidays are a time where the simple things in life can be enjoyed: family, time together, making memories. And yet it's also a time where consumers often go to any length to ensure the holidays are good for family – usually in the form of presents and other gifts.

Every parent wants to play Santa Claus to make their kids' holiday a memorable one, but sometimes financial constrictions at the time make shopping a bit more difficult when trying to get the last toy on the shelf.

According to a 2013 survey from Lexington Law and Harris Interactive, 57 percent of U.S. adults with children said they were willing to accrue debt to keep children happy. The same trend will undoubtedly continue this shopping season, and while it's not the worst thing ever, it's important to keep within your limits to ensure happiness while also keeping an eye on your credit score.

Keeping a budget
While it's hard to put a cap on making a child smile, you essentially have to do just that when taking on debt to cover gift purchases. Understanding what you can reasonably spend will prevent you from taking on so much credit card debt as to make repayment difficult or impossible, lowering your credit score as a result.

The same Lexington Law survey found an interesting correlation between income and willingness to spend. Those with a household income of less than $35,000 were on average willing to accrue $700 in debt, while those with an income of $75,000 on average said they'd take on $300. The survey also found nearly one-third of the 90 percent of adults who would buy presents had no limits on how much they would spend.

These kind of statistics illustrate – a somewhat seasonally forgivable – offense of not being smart with your money. 

To control your debt and mitigate any possible damage to your credit score, start by taking a couple common sense measures to plan your spending: Establish a list of who you're buying for and the maximum you will spend on that person and budget how much interest you stand to pay. Start this process early enough and you can generate enough savings for when shopping time comes. Try to keep charges to one card and always keep gift shopping trips separate from other visits for different holiday supplies. 

It's understandably hard to control spending when it comes to the holidays, but making small efforts to avoid big impacts to your credit score is an important thing to keep in mind.