Holiday purchases, mobile view banner, Nov 2022 blog, Travis CU,

How You Should Pay for Holiday Purchases

The Holiday Season is already a stressful time of the year for many. Add in the expectations of holiday spending and it can become even more difficult, especially if you haven’t prepared from a financial perspective. Whether you save throughout the year or plan to borrow money for expenses, knowing your options on how to pay for festive purchases may help relieve some of the pressure of the holidays.

Saving All Year

If you prefer to pay cash and want to avoid getting into debt, the best option for holiday shopping is to save yearlong. According to Experian, U.S. consumers spend on average $1,000 each winter on holiday gifts. Using that as a goal, if you saved $100 a month or $50 bi-weekly for 10 months, you would save $1,000.

Saving money throughout the year is easier when you have a dedicated account to put your money in that’s separate from your everyday checking or other savings. Some financial institutions, such as Travis Credit Union, offer Target Savings accounts that allow you to set aside money for a specific goal. These accounts are often free to open and require little or no opening deposit. With time and a savings discipline, you’ll be less stressed when the holiday season arrives.

Borrowing Money

If you don’t have enough time to save for the holidays, obtaining a loan is a convenient option. There are various ways to borrow money, including a personal loan, credit card or utilizing a “buy now, pay later” program. Of course, borrowing will mean incurring debt that you should pay off as soon as possible. During the 2021 holidays, more than 36% of American consumers incurred an average of $1,249 in debt for gifts, travel and entertainment, among other things, according to Lending Tree.*

Selecting the right borrowing option could make a difference in how much interest you pay and how long it takes to pay off the loan. Here’s a look at the most common ways to borrow.

  • Personal Loans can be a great option for holiday purchases if you prefer to receive a lump sum of cash and want a fixed monthly payment in return. Personal loans tend to have a lower interest rate than traditional credit cards. Most personal loans can be approved the same day, with funds deposited directly into your account. Travis Credit Union offers personal loans throughout the year. Visit our Personal Loans page to learn more.
  • Credit Cards are a very popular form of borrowing for Americans. A Lending Tree* survey of American consumers during the holiday season revealed that 62% of borrowers put their purchases on credit cards. Using a credit card can also reap benefits if your card gives you reward points that you can use for cash back, merchandise or travel. TCU’s Platinum Visa® credit card offers a robust rewards program. Beware of taking a cash advance on your credit card, however. Doing so will incur cash advance charges, with rates that are typically higher than your card’s purchase interest rate, making the balance more difficult to pay off.
  • Buy Now, Pay Later programs are increasingly being offered during the online shopping checkouts. This option allows you to purchase items immediately and pay for them in installments, making it easier to buy higher-priced items. A study* conducted found that this option was more popular with parents of young children, six-figure earners, and millennials.

    If you’re considering a buy now, pay later option, review details of the loan offer first because there may be interest or fees associated with installment or late payments. Be aware of how many installment payments you’ll need to pay off the loan and always make the payments on time to avoid getting charged late fees.

Your financial wellness is important to us throughout the year. The more you know about spending, borrowing, saving and planning, the better prepared you’ll be for the holidays. You can learn more about our financial wellness efforts at

*Source: Lending Tree, 36% of Americans Took On Holiday Debt, Dec. 2021

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