Using Credit Cards To Buy All Those Gifts

Even if people use cash all year, the holidays prompt many to whip out the charge card. Whether it’s for the rewards points, or just to ease the cash flow a bit during the holidays, credit cards tend to make a regular appearances around the holidays. Even this holiday season, when more people are trying to stay away from credit, people are still very much a part of the holiday shopping experience. If you are going to use a credit card this holiday season, you might want to consider these tips for responsible char card use during the holiday season: •Keep to your holiday spending budget: remember your income and your bills, and then create a realistic holiday budget that includes gifts, entertaining, decorating and after-Christmas sales. You get extra points if you work this out far in advance and start setting funds aside for the holiday season in order to reduce the financial stress you put on yourself. •Keep track of all your spending: The number rule for keeping things under control when it comes to using credit cards during the holiday season (or any season) is to keep track of all your spending. Keep your receipts, and when you get back from a shopping trip, head to the personal finance software or the ledger and record your spending. •Dont exceed your credit limit: Be aware of where you are at with when it comes to your credit limit. Keeping track of your expenses can help you monitor how close you are to your limit. Avoid going over your limit and having to deal with the high fees and increased interest rate that come with exceeding what you have available. •Have a plan: Think about what items you want to put on what credit card. For instance, you might put your online purchases on the credit card that helps you save for your child’s college. You might put all of your gift shopping on your airline miles card. Think about which rewards are worth most to you, and then spend accordingly. •Think twice before applying for any store credit cards: Right now, it’s very tempting to get department store charge cards so that you can get a certain percentage off. Before you apply, do a cost to benefit analysis. Consider the impact on your credit score, and also consider that most store cards don’t offer rewards, while charging a higher interest rate. This means that you want to determine whether 10-15% off is worth the costs and missed rewards associated with a new department store credit card. •Pay off your balances fast: When you draw up your holiday budget, you should consider whether or not you can pay off what you have spent on your charge cards. You should always make sure to be able to pay off your charge card balances as close to immediately as possible. The longer you carry a balance, the more you will pay in interest charges. If you are counting on rewards, the interest you pay can quickly destroy the value of your rewards. In the end, you can ease your cash flow, and reap some rewards, if you use your credit card during the holiday season. However, you need to plan ahead and take precautions to ensure that you are using your card responsibly. Also, if you want a credit card for the holidays and dont yet have one I have compiled a list of my a preffered credit cards. Also, I always advise the use of Discover credit cards because they usually have the best rates, rewards and customer service.