6 Easy Credit Tips For The Holiday Shopping Season

By: Samantha Savory

1. Know Your Credit Limits

Don’t get sidetracked by that amazing deal on a 42’ flat screen TV during your holiday shopping.  Why you ask?  When you check out at the register and are declined because you don’t have enough credit left on your card, you may find yourself feeling financially irresponsible and a tad bit embarrassed. Also, be weary of credit card companies and ‘over the limit’ fees.  Your credit card company may also approve a transaction even though it’s over your credit limit and charge you an outrageous fee. Bottom line: Know how much credit you have on your cards before you go shopping.

2. Don’t Let the Retail Credit Card Offers Tempt You at Checkout

I guarantee you every retail store cashier that you interact with this holiday shopping season will try their earnest to convince you to save 5 or 10% by opening a new credit card account. Don’t fall for it! There’s nothing wrong with a discount, and credit cards in moderation  are acceptable.  But typically, store credit cards offer low limits and high interest rates, which is the type of credit that you want to stay away from.  In addition to not getting much bang for your buck, every time you open a new line of credit, your credit score is affected.  It will negatively show up on your credit report if you have too many lines of credit open in your name, especially in a short period of time.  So just remember this shopping season: Say NO to retail store credit cards!

3. Check Your Current Interest Rates On Your Credit Cards Before You Shop

Credit cards frequently offer variable interest rates, which means that they can change at any time.  You may go holiday shopping using a specific credit card because you know it has a low interest rate, but double check the rate before you hit the store because it may have changed recently because it is a variable interest rate card and in end it can cost you much more money than you had originally intended.   It’s imperative to know your interest rate on each of the credit cards that you intend on shopping with during the holidays.

4. Be Careful Typing Your Pin Number When Making Holiday Purchases

Identity theft is something to be aware of throughout the year, but thieves strike more often during the holidays so it’s a smart idea to be extra cautions when making holiday purchases. Also, when it comes to using a credit card for holiday purchases, make sure you get your credit card back from the retail associate and don’t forget the receipt!

When shopping online, look for security symbols – like VeriSign or TRUSTe– on websites to make sure they’re safe, secure and use encryption to protect your personal financial information.

5. Prioritize Monthly Bills Over Holiday Shopping

As much as we all love Christmas and holiday shopping, it’s important to keep your priorities straight.  Even though you may want to get your mom that fabulous Michael Kors purse for Christmas or Hannukkah, paying your rent or car payment is clearly more important.  I’m sure mommy dearest will understand that although she deserves the world, you have to be financially responsible, even during the holidays. Remember, nearly 35% of your credit score is determined by the consistency that you pay your bills each month. If you miss even one payment, you can significantly damage your credit score.

6. Only Spend What You Know You Can Pay Back

If the debt you accumulate during the holidays takes you until next year’s holiday season to pay off, that’s a clear indicator that you’re spending too much. Setting a budget for your holiday shopping is the key to having a financially responsible holiday shopping season.  Always remember to be realistic when making your budget and then once it is made, stick to it!

For more tips and tools to for budgeting and credit card usage, check out www.ConsolidatedCredit.org today!

About the Author

Samantha Savory is a 20-something-year-old recent communications graduate whose mission is to financially succeed and thrive in this economy. She writes about personal finance and anything related to shopping and saving money.