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You want to give gifts to friends and family but without sinking into debt.  With a little planning, you can purchase gifts for others and avoid paying for them (plus interest!) for months or years later. 

Save in Advance

Saving in advance offers several advantages over choosing credit for the holiday season.  By saving in advance, your money will be earning interest instead of you having to pay it. This will lower your overall cost associated with holiday spending. Second, saving is a good way to avoid overspending because you do not have an excess of credit available. This makes saving an easy way to stay within your holiday budget. Some financial institutions offer a savers club account that lets you make deposits for a special purpose (like holiday gift giving) all throughout the year. 


Layaway was once very popular, but many stores discontinued layaway once credit cards were more frequently used.  Layaway appears to be making a comeback, however.  It allows you to choose items to purchase and have the store set them aside (hence the term lay away) while you make regular payments to the store for them.  Layaway offers the advantage that you can select what you want to give someone now and not worry whether it will be available at a later time.  It also lets you keep your purchases hidden from view of the intended receiver.  In the past, stores would often offer free layaway as an enticement for you to purchase the items from them.  Now, there are often fees associated with putting goods on layaway. So while layaway offers the advantage of not using credit, be careful that the fees don't add up to what you would have paid in interest collected on credit cards.


Financial institutions usually see a spike in the disbursal of both Credit Cards and Personal Loans during the holiday season. Taking out a loan and repaying it timely can help build credit and improve FICO scores. Just be sure to use credit wisely.  Here are a few tips:

Credit Cards

  • Don't open a credit card with an excessively high available balance. You might be tempted to go deeper into debt, and the total amount of available balances in considered as part of your credit score.
  • Don't overspend your budget.  Plan ahead about how much you will spend on gifts.
  • Pay attention to interest rates.  Unless you pay off your credit card balance each month, the interest you pay on the balances can really add up.  Compare rates between credit cards and personal loans to decide which one is best for you.

Personal Loans

  • Just as with credit cards, do not take out a loan for more than you need.   You could be tempted to think you have more money to spend when actually you don't.
  • Make a plan to ensure you can pay back your loan in less than a year. You don't want this year's purchases carrying over into the next holiday.
  • Arrange to have automatic payments deducted from your account so that you always pay on time.

While holiday shopping and gift giving is fun, take stock in what you have and what you can give that doesn't cost any money.  Give your time and talents, and perhaps these creative gifts will be more memorable than something purchased in a store.