Holiday shopping can involve a lot of spending — and it’s not necessarily a bad idea to break out the credit card in order to help your holiday budget go a little further. But when you’re shopping on credit, it’s easy to overspend and send yourself into a mountain of credit card debt that could take months to repay. So before you buy, take some time to carefully consider how you’re using your credit card, because with a little financial savvy, using your credit card can even get you ahead this holiday. Here are our top tips for getting the most out of your credit this shopping season.
1. Use the right card for your holiday shopping. Because you’re probably making a lot of purchases this holiday season, it makes sense to put it on a card with fewer fees, low interest, and a credit limit that will cover your holiday spending, so you don’t wind up spending more in financial fees than you need to. Another good option — especially if you plan to pay the balance off quickly — is a rewards card, which will let you turn your holiday spending into big bonuses for you later.
2. Use your credit card benefits to your advantage. Depending on your credit card, you could have a variety of useful benefits available to you, like rewards points, cash-back offers, extended warranties, and even price protection. Be sure to check out what kind of benefits your card of choice offers and take advantage of them if you can. You may find your card offers for extra rewards points or cash-back bonuses for shopping at certain retailers — so, again, be sure to check what’s on offer and adjust your shopping list accordingly.
3. Don’t send yourself into more debt than you can handle. Like we said, it’s easy to let yourself go into debt when you’re spending a lot on a credit card — but with a bit of planning, you can avoid it. Before you buy a thing, be sure to set a holiday shopping budget and, if you plan to carry debt on a credit card, work out how and when you’ll pay it off. Figuring this out in advance will save you a lot of headaches later.
4. Don’t be tempted to open new credit accounts. At checkout, you’ll often get offers to open a new credit card account for savings on today’s purchase, but don’t be tempted by a quick bargain. Though a 10% or 15% discount on your purchase may seem appealing, a new credit card can tempt you into overspending — and come with high interest rates and other fees you’ll have to deal with. If you really do want to pick up a credit card from a retailer this holiday season, make sure to read the fine print and know what you’re getting into before you sign up.
5. Beware of identity theft. Identity theft is a risk year round, but it’s especially risky this time of year as thieves try to take advantage of frazzled holiday shoppers. Whether you’re shopping in a store or online, be careful with your personal information — don’t give away your credit card information, online or offline, to anyone except a legitimate store. And just in case, be sure to keep a close eye on your credit card statements — checking online works best, because it lets you see your credit card charges immediately — so you can immediately report fraud if your card information has been stolen.
Hopefully these tips will help you get the most possible out of your credit card purchases this holiday season. So good luck and happy shopping!