Suze Orman Says If You Buy Someone A Gift On A Credit Card, 'You Are Financially Sabotaging Your Future'

As we are amid the holiday chaos and joy, hunting down presents at the last minute before getting together with our families, financial expert Suze Orman strongly warns about the dangers of buying gifts with credit cards. On a recent episode of her Women & Money podcast, Orman cautioned listeners against letting financial guilt or societal pressures lead them into debt during the season of giving.

Orman discusses how many people carefully manage their finances throughout the year only to undo that progress in December. She refers to the last ten days before Christmas as “G-Day” or “Gift Day,” when financial guilt and holiday spirit often lead to impulsive spending.

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“You only went in there to spend maybe $50…and before you know it, you walk out with, typically, by the way, around $600 or $700 worth of items,” Orman explains. She adds that people think they are saving with the discounts that retailers offer around this time but in reality, most people spend way more and even go into debt.

Using hypothetical scenarios, Orman outlines how small credit card purchases can snowball into significant debt. For instance, charging $1,000 for holiday gifts on a credit card with a 28% interest rate can take over nine years to pay off if only minimum payments are made. The total cost? Nearly $3,000 when factoring in interest.

According to Orman, the average American carries $6,329 in credit card debt, with an average interest rate of 23.37%. At these rates, paying only the minimum due can take more than 21 years to clear the balance, costing thousands of dollars in interest.

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"You are not being generous to yourself," Orman said about those left with credit card debt after the holidays. "You are financially sabotaging your future."

A MarketWatch survey found that 67% of Americans use credit cards for holiday gifts. About 12% of those surveyed said they are still paying off their balances from last year's shopping. 

Orman also reflects on her experiences visiting homes during her time on The Oprah Winfrey Show. She often found closets filled with unused gifts that recipients didn't like but felt guilty returning. “You wasted their money by taking this gift under the pretense that you loved it,” she told those who kept the gifts. Even well-intentioned purchases can create emotional and financial burdens if they are not truly needed or appreciated.

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To Orman, real generosity means giving in a way that doesn't jeopardize your financial health. She advises only buying gifts with cash—and only if you have no existing credit card debt, a fully funded emergency fund and adequate retirement savings.

If those conditions aren't met, Orman suggests finding creative, cost-free ways to show love and appreciation. Honesty about your financial limitations can inspire mutual understanding and strengthen relationships.

Orman's message is clear: buying gifts with credit cards, especially when you're already in debt, is a form of self-sabotage. She encourages listeners to think beyond the fleeting joy of holiday giving and focus on the long-term impact on their financial future.

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