How to avoid overspending on credit cards this Christmas

A new study from credit card brand Aqua has revealed just how dramatically festive spending habits spiral each year, with the average Brit overshooting their Christmas budget by £348. As households continue to grapple with rising living costs, the findings show that Christmas remains one of the biggest pressure points in the calendar for personal finances and credit card behaviour.

The research, based on Aqua’s updated 2025 Financial Learnings and Mistakes Report and a survey of 5,000 UK adults, found that 65 percent of Brits admit to overspending at Christmas. That makes it one of the most common areas of budget failure, outstripping holidays, nights out and even day-to-day grocery spending.

Christmas credit card overspending is widespread

The report highlights that Christmas is far from a one-off slip for most people. More than one in five (21 percent) say they do not set a Christmas budget at all, which increases the likelihood of relying on credit cards or dipping into savings to cover December’s additional costs.

Where overspending does happen, it is significant. The average £348 overspend reflects shopping for gifts, food, travel, festive events and the numerous seasonal extras that tend to go unplanned.

Spending pressures vary by age, but those in their mid-thirties to mid-forties overspend the most, averaging an additional £39 beyond their intended Christmas budgets. For families in this age bracket, often balancing children’s wish lists, social commitments and rising household expenses, this level of overshoot is becoming increasingly normal.

Christmas is not the only category where budgets are routinely missed. The report shows average overspends of:

• £379 on groceries
• £360 on tech purchases
• £281 on clothes
• £256 on nights out

The findings point to a broader challenge around financial planning. In fact, 38 percent of respondents say their biggest financial mistake is simply spending beyond their means. A further 31 percent believe they underestimate expenses or fail to set budgets in the first place.

Credit card anxiety can ruin Christmas

Aqua’s research also reveals growing anxiety about credit health, with over a quarter of Brits saying a poor credit score leaves them feeling worried or stressed about the future. As festive spending builds up on credit cards, many households begin the new year with heightened financial pressure.

There is also a generational shift in how people seek money advice. Up to 67 percent of those aged 25 to 34 now turn to AI tools like ChatGPT for financial guidance, while 22 percent of 21 to 24 year olds get advice from platforms such as TikTok. Traditional banks and advisers rank well behind.

With the cost of living still squeezing budgets, the findings suggest this Christmas could be difficult for households trying to balance festive expectations and financial discipline. Overspending may be common, but the increasing reliance on credit cards and the emotional toll of financial stress underline the importance of budgeting early and sticking to realistic limits.

For those heading into December without a plan, the data offers a timely reminder. Even small steps such as setting a budget, tracking spending and being mindful of credit use can help avoid being among the many who start the new year with a financial hangover.

5 tips to reduce your reliance on credit cards this Christmas

Here are five practical tips to reduce reliance on credit cards at Christmas, based on the themes in the research and typical spending patterns:

1. Set a realistic budget before December – Most overspending comes from not having a plan. Work out what you can genuinely afford for gifts, food, travel and social events. Break it into weekly spending limits so you do not end up putting last-minute costs on a credit card.

2. Use a separate Christmas savings pot – Move a set amount into a dedicated pot or savings account each month in the run-up to Christmas. Ringfenced money reduces the temptation to dip into credit and gives you full visibility of what you have to spend.

3. Prioritise essential festive costs – List everything you intend to buy and rank it by importance. Cover essentials first and leave non-essentials until you have the money available. This reduces impulse purchases that often end up on credit cards.

4. Switch to debit or prepaid cards for gifts and groceries – Using a prepaid card or a debit account with a fixed spending limit can help keep Christmas costs under control. Once the balance is gone, you have a clear signal to stop instead of rolling extra costs onto a credit card.

5. Plan ahead for sales and spread costs sensibly – Take advantage of Black Friday, early promotions and loyalty points to reduce December’s financial pressure. Buying a few items each month spreads costs without taking on debt and means you are less likely to rely on credit for last-minute spending.