By Courtney Soinski
As you buy holiday presents for your friends and family this year, using your credit cards wisely may actually save you money.
Follow these tips this holiday shopping season to help you save money, stay on budget, and protect your credit in the future.
SET Your Limits (and stick to them)
Set a budget, spend what you can afford, and plan how you will pay it off.
Make a list of those for whom you’ll buy gifts and set a dollar amount for each. Total to determine your holiday budget – and then stick to it. Have a set number of how much you plan to spend this holiday season, and don’t spend more. Plan out how you will be paying off your holiday purchases and set a deadline.
Leave your cards at home unless you plan to make a specific purchase.
Retailers are experts at temptation and it’s easy to get caught up in the holiday spirit. Find something that is perfect, but outside your budget? Go home and re-evaluate your budget before splurging. If it’s still a good idea and you can fit it into your budget, you can go back to the item. It also gives you an opportunity to price compare online to make sure you are getting the best deal.
Know your interest rates.
It’s common for credit card to have a variable interest rate. If that’s the case, your interest rates could increase without you even realizing it. Know this information before you go shopping to avoid using a higher interest card versus a lower interest one.
PREPARE to shop
Look for credit card based discounts
More credit card companies are offering coupon codes or other ways to save money on things you might have purchased anyway. Most now have websites where you can sign up for special offers, like a $20 discount off a $100 purchase at a certain store. Review these offers and you may save big.
Use points and rewards.
This may be the best time to cash in on rewards or points on gift cards – to use as gifts, or to purchase gifts at the retailers from whom you’ve planned a purchase.
There are even free apps that can help you make the best purchase decision based on the rewards offered on each card. For example, Wallaby keeps track of the rewards available for each card – even rotating offers with deadlines. Use the app while shopping to determine which card will give you the best rewards for each gift you buy.
WHILE You Shop:
Monitor your credit limits.
Know the credit limits on all your credit cards and the balances you are carrying. Getting too close to your limit can negatively impact your credit score.
Be wary of retail credit card offers at checkout.
When you check out, you may be asked if you want to save 10% on your purchase if you open a credit card. Many of these cards have high interest rates and low credit limits – using a large percentage of your credit can be bad for your score. Your credit score may also be negatively impacted by opening a new credit line.
Be wary about identity theft.
The holiday season is definitely prime time for identity theft. Get your credit card back after making a purchase and take the receipt. If you decide to shop online, make sure you look for security symbols like “VeriSign” or “TRUSTe” because those sites protect your personal financial information using encryption.
Remember to pay your bills on time.
Did you know that 35 percent of your credit score is determined by how reliable you are to pay your bills? It’s important to not miss even one payment. Life can definitely get hectic during the holidays, but don’t let parties, decorating, or shopping distract you from your financial responsibilities.
Happy Holiday Shopping!