Christmas is the season that includes buying gifts and hosting a party or two. There’s nothing wrong with spending but you must figure out what you can afford and what will it cost you. You must do some planning, the fact is, folks end up paying for holiday spending for the entire next year. Take time to budget and write out what you plan to do and buy, planning is better than never giving it a thought.

My friend used to be like that. She will spend a lot of money for the season, not knowing its outcome. She knew that she have a bad credit score. She even asks for a free credit report. She was never approved for any credit. She really wanted to throw a party so she decided to apply for a short-term loan on line that took the payments right out of her checking account. I told her not to, because it will only allow loan providers to access her bank account. I even told her just save what she can look for bargains, cut back or think of waiting to give her holiday gifts in the New Year. If it is the thought that counts there’s no deadline for giving.

She took the loan and threw a party, as expected it worsen the situation. She learned a lesson and now she is starting from scratch. She’s now careful in spending because she wants to have a credit report.

In addition, if you are going to use new credit or take out a loan, make sure that you really understand how much it will cost and have the totally free credit report. Is the loan offering you a teaser rate or no interest for a few months and then slamming you with lots of finance charges? Read the fine print so that you fully understand the terms and interest rate. And I must say that credit card should be used minimally especially in buying gifts for this season.