5 Holiday Credit Card Habits of Highly Successful Shoppers
If an image of your credit card immediately comes to mind when you hear the words “holiday shopping,” you aren’t alone. Some people do it the right way—saving throughout the year so they don’t need to buy on credit. The rest of us mere mortals start thinking about the holidays when they’re a couple months away and do the best we can to cover costs. If you’re a mere mortal, like myself, here are some holiday credit card habits that will help you make it through the season with your finances intact.
Give your rewards card a workout during the holiday season
Rewards cards are a beautiful thing during the holiday season. They offer you a great way to earn points, cash, or some other benefit with each purchase. The more you use your rewards card, the more you earn. In fact, you can actually make money with your rewards credit card in this way, as long as you pay it off in full at the end of every billing cycle.
Make a list and a budget
It’s easy to overspend on a credit card so remember THAT MONEY ISN’T YOURS…YOU HAVE TO PAY IT BACK!! Keep yourself in line by developing a list of things you need to buy and a budget for how much you plan to spend on each item. It’s probable that you will forget something (this isn’t a personal dig—we all do it) so budget for forgotten items as well. Once you have your budget, put it in your pocket, wallet, or your pocketbook and look at it frequently. You must use it in order for it to work.
Review your credit card online regularly
In general, it is a good idea to keep tabs on your credit card expenditures. Checking your online account regularly helps you keep track of what you’re spending and identify fraudulent charges more quickly. This is even more important during the holiday season as you endeavor to stay within your budget and protect yourself from fraud, which tends to spike at this time of year.
Don’t get a bunch of store credit cards
Store credit cards can be tempting. They usually offer a certain percentage off the price of your purchase when you open the card. The problem is, in order to open a new credit card, the store will have to check your credit. This can cause a drop in your credit score, which could affect your credit for years to come. If you open a bunch of credit cards and can’t pay them off, the high balances will also harm your credit score. If you shop frequently at a certain store, a store card may make sense, but in most cases, it’s best to pass on the deal.
Move holiday balances to a low- or no-interest card
As great as rewards cards are when you’re buying, they tend to charge high interest rates on unpaid balances in exchange for those great rewards. If you’re not able to pay off the balance of your rewards credit card once the season has passed, you could end up paying much more for those gifts and meals than they were worth. Avoid racking up unnecessary interest charges on your rewards card by transferring the debt to a no- or low-interest credit card.
About Heidi White
Heidi White is the content and communications specialist at VSECU. She is responsible for communicating information and ideas through the written word for the credit union’s internal and external audiences. Her passion is helping people live more joyful lives through timely, useful, and compelling content. Heidi lives in Barre, Vermont.