Australians rack up billions in credit card debt in the run-up to Christmas each year, but savvy savers are set to buck that trend.

In December 2018 alone, Australians borrowed nearly $30 billion – a bill of roughly $1863 per credit card, according to Finder.com.

It’s a sizeable bill, and one that more than a quarter of shoppers will still be paying off, almost 12 months after the fact.

But the post-splurge “debt hangover” is avoidable, and according to Kirsty Lamont – money expert at financial services comparison site Mozo – many are already taking steps to lessen the damage.

“Many Australians have been getting savvier about trying to reduce their credit card debt, and are actively looking towards other forms of payment instead, such as debit cards and buy-now-pay-later,” she told The New Daily.

“Even though there will be a spike in credit card debt this Christmas, we may not see those huge levels of debt that Australians have racked up in the past. We may start to see those reducing in years to come.”

In fact, the use of buy-now-pay-later (BNPL) services has skyrocketed in the past year – particularly among younger users – and could replace credit cards as the preferred payment method within a few years.

These services, such as Afterpay and Zip Money, allow shoppers to make a purchase instantly, but pay in instalments afterwards, and are often cheaper than a credit card because they don’t charge interest.

While they can reduce costs, Ms Lamont cautioned shoppers to be vigilant with their spending, as many find it easy to rack up hefty bills when using delayed payments. 

“These services are very popular and essentially free if you make repayments on time, but you do need to be careful about buying wisely and not spending more than you normally would,” she said.

“If you use BNPL services responsibly, they can be a great way to spread the cost of what is a very expensive season for many Australians over a longer period of time.

“The trouble is that if you’re not very careful about budgeting when you’re using these kinds of services, it’s very easy to spend more than you normally would.”

Shop early, plan ahead

Regardless of how shoppers choose to pay for their gifts, Ms Lamont said the best way to keep Christmas affordable is for buyers to plan want they want to buy ahead of time, budget appropriately for it, and avoid leaving things to the last minute.

“Do your shopping as early as possible – you want to avoid that 24th of December shopping frenzy because if you’re panic purchasing on December 24th, you’re much more likely to pay more,” she said.

Ms Lamont also suggested asking retailers to price match with their competitors too, as competition between sellers is “pretty stiff” throughout the festive season and “there are absolutely discounts to be had” for those who shop smart.