Utilize Credit Without Accumulating Holiday Debt

I've seen countless online articles and cable news segment this year about something that shouldn't even be a thing. Perhaps you've seen or read them, too.

A number of reporters and show hosts are talking about how to handle your "holiday debt" this season.

Excuse me? Holiday debt?

These stories are reporting on holiday debt like it's something different than regular ol' consumer debt that people rack up during every other month of the year. Like it's something we all naturally accumulate in our quest to find and buy the perfect gifts for our friends and family.

Let's talk about the number of problems the idea of "holiday debt" brings up.

Christmas Is Not a Competition

First of all, you should never feel obligated to go into debt in order to purchase material goods for others, no matter what time of year it is. Your financial situation may not allow for you to buy gifts for everyone in your family, all of your friends, each coworker in the office, and more.

And that's fine! That doesn't make you less of a person -- nor does it mean you didn't do enough for others this holiday. Christmas and every other gift-giving occasion should not be a competition.

If the "winner" is the one with the most debt, is that really the kind of game you want to play anyway?

If your loved ones feel differently, lead by example. Tell someone how much they mean to you. Tell your family that you would rather spend time with them instead of money on each other, because those experiences are more valuable than gifts you could charge on your credit card.

There's Nothing Holly Jolly About Seasonal Overspending

Far beyond my personal preferences to focus on relationships and experiences over material things, holiday debt presents most people with a problem that goes well into the New Year.

The average person pushes themselves about $1,000 into the red for the holidays, and it takes 5 months on average to pay that debt off. That means your holiday shopping is still going to be costing you into next spring and summer!

Your financial wellbeing is worth far more than a few trinkets and toys that are very likely to be forgotten before you're done paying off your share of holiday debt.

You Can Use Credit in a Smart, Responsible Way

The idea of "holiday debt" suggests that spending and debt go hand in hand. But spending isn't inherently bad, and neither is credit. Money is meant to be used -- used in a smart, responsible, and thoughtful way.

I have no problem with using credit to make purchases. In fact, it's my preferred method of paying for what I need to buy for a number of reasons.

Credit is safer than cash. If I need to make a return and there's an issue with doing so, I may be out of luck if I paid with cash. With credit, I can dispute the charge. Credit can also help my money go further if I use it responsibly. I can take advantage of special offers provided via credit companies and I can earn reward points on purchases I need to make anyway.

The trick to responsible credit use is to ensure you never spend more than you can afford, even if your credit limit allows you to charge more than your budget can handle. You also need to make payments in full and on time each month.

At the very least, if you're not sold on the idea of cutting back on the consumerism this Christmas, you can budget and plan ahead. According to a recent survey by PayPal and Koski Research, 45% of Millennials say they'll use credit to buy clothes and 33% say they'll use it for electronics through the end of 2015. If you fall into categories like these, use a tool like PayPal Credit to build the expense into your monthly budget instead of charging everything to your credit card.

Unlike most credit cards, PayPal Credit allows you six months to repay purchases over $99 without paying fees or interest. This will help you accomplish the shopping you need to do without accumulating that awful holiday debt.