How to Avoid Credit Card Debt During the Holidays
It’s the most wonderful time of the year, but along with that comes a slew of stress about buying the perfect gift, accommodating family members that are visiting from out-of-state, and a ton of spending! You’re soon entering the New Year with a resolution to try and recuperate from the financial strain that the holidays just put on you. Don’t fret though! With some great financial planning, and very strategic money traps to avoid, you can have a financially stress-free holiday and transition comfortably into tax season! Check out these money-tips to help.
Avoid deferred interest deals.
Most stores that offer more expensive products, such as jewelry and furniture, typically offer interest free financing if you pay the credit card bill within a certain amount of time. This seems like a great idea, but for the majority of us who don’t have the discipline or the means to pay off the bill within the designated time frame, you’ll just end up paying the extremely high interest rate after the interest free period has past. It’s best to avoid this all together. Instead, try some coupon codes from your favorite holiday stores to score some extra savings to stay within your budget.
Stay on track!
We all tend to lose focus during the holidays. It may be the temptation of all the stores and products available in the malls and shopping plazas we frequent during this time, or the extra family in town to distract us – but it happens! Try to stay on track as much as possible to avoid unnecessary spending. A great way to do this is to keep both a list of the presents you need to buy and a budget. If you start to fall short for presents, try and analyze the budget to find ways to cut on the non-holiday parts of the budget, such as food and decorations.
Pay off your debt.
The most popular method of payment this season is credit, but keep those interest rates and your credit score in mind! The more you spend, the higher that interest becomes on your credit card as well as those monthly payments. Make sure that whatever you end up spending on those credit cards is paid off as soon as possible before it harms your credit score and also ends up breaking the bank with those interest rates.
Keep in mind that although this is supposed to be a time for generosity and peace, this is high time for thieves and scam artists. Make sure you are safe both physically and virtually. Keep your car locked at all times, keep your personal belongs close to you, and try to avoid public Wi-Fi hotspots where hackers could steal your personal information.
Be wary of store credit cards.
Store credit cards can be a great way to save money with all the rewards they offer, especially during the holiday season! They usually provide deep discounts on select products or offer free shipping, or extra points that can be used on future purchases. But you should also make sure you are keeping your budget in mind and not flippantly applying for credit cards just to squeeze in a few last minute gifts! Next thing you know you’ll have way too many cards and payments to keep track of, and those rewards are null and void because of the high interest rate you are now trying to tackle. Most of these stores also have great savings through online promo codes and store-wide sales. So if you don’t already have a store card, try checking out those discounts first before you jump into getting another line of credit!
Holiday season is arguably the best time of the year – so don’t bog yourself down with debt and all the stress that comes with it. Shop within your means and stay responsible so that when you enter the New Year, you’ll be entering it knowing that at least one of your resolutions won’t be re-stabilizing your finances!