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Using Credit Cards for Holiday Spending

For many people, the holiday season increases pressure for spending. The money has to come from somewhere. If your contemplating opening a new credit card or using your credit for holiday gifts, read on for tips and tricks to maximize your incentives and avoid common pitfalls. 

Applying for New Credit for Holiday Expenses

Be honest with yourself. Do you really need to use credit to get through the holidays? Will you be using your credit to buy necessities, or non-essentials? It's important to keep in mind that credit comes at a cost, and the longer it takes to pay down the balance, the more interest will accrue. If you can get by without taking on new debt, you may be better off financially. 

When applying for a credit card, always look at the terms, especially the effective interest rate for purchases. Keep an eye out for promotional offers. Some credit cards may offer low introductory interest rates, cash incentives, or bonus points upon meeting certain criteria.

Avoiding Credit Card Debt During the Holidays

Many people feel pressure to buy gifts that are outside of their budget, but debt can put a big damper on holiday celebrations. It's better not to believe the fallacy that one must spend a lot of money to show their appreciation or love. Making a gift and spending quality time with a loved one can have a stronger impact than a flashy gift. It could put you in a better position financially, which in turn, is beneficial for everyone around you.

Maximizing Credit Card Awards and Incentives

Pay close attention to the type of rewards available from your particular cards. Some cards allow for rewards across all categories of purchases, while some cards offer greater incentives for particular categories such as restaurants, hotels, gas, supermarkets and more. For example, if your card is offering 2% off supermarket purchases during the holiday season, then it may be a good time to stock up on essentials such as paper towels, plates, plastic ware and other non-perishable items that can be used well into the future. To the extent possible, try maximizing the usage of the categories that offer you high incentives.

Reducing Credit Card Debt

Paying debt quickly will avoid the accrual of additional interest. However, when funds are stretched thin, it can be difficult to pay down holiday debt. Consider opening a new credit card that allows for a zero interest or low-interest balance transfer. The longer the promotional period is, the more time you'll have to pay down your debt under the low rate. You can transfer your current credit card debt to the new card and potentially save a substantial amount in interest during the promotional period. Be aware that some companies will charge an initial transfer fee of 3%-5% of the balance. Look for cards that offer a $0 initial transfer fee. Also, be aware of other terms such as annual fees, late fees, and other possible fees related to maintaining the card.

Credit Card Fraud During the Holiday Seasons

Identity theft is a tremendous issue. Knowing that consumers are using credit cards at a high volume during the holidays, logic dictates that fraudulent activities will increase during those periods as well. Furthermore, since consumers might have a large amount of transactions during the holidays, it may be harder to identify fraudulent purchases unless the credit card statement is closely scrutinized. Most creditors will investigate fraudulent charges and will protect consumers, so long as they are put on notice promptly. As such, look at your statements closely and notify your creditor immediately if you notice any unusual activity. If your creditor allows you to set up account alerts, you should utilize that feature to help inform you of any large purchases.

Holiday Budgeting Tips

Don't spend what you don't have. You won't be doing yourself or your loved ones a favor by putting yourself in financial distress. Be creative when it comes to gift giving. Try making something. Hand-written holiday cards can have more impact than store bought cards. Be generous with your time and your love.

Millions of dollars are spent on gifts that are thrown into the trash almost immediately. When purchasing a gift, try to buy something that can have long-lasting impact, perhaps something that can carry sentimental value. Buying a disposable gift can be a waste of your money, a burden on our environment, and may have merely a nominal impact on the recipient. Give a gift that counts.

When not to use a Credit Card

If you are unemployed, or otherwise, do not have an expectation of having excess income to pay down your debt, don't charge anything other than absolute necessities during the holidays. It's important to be honest with yourself. Putting yourself at risk of bankruptcy for non-essential items can have a long-lasting detrimental effect on your mental well-being and your life in general. Don't fall into the trap. Stay strong, and look out for yourself. The people that are important to you benefit from your well-being. If you take good care of yourself, financially and otherwise, that is a gift in itself to everyone you know.

Credit Card Debt Relief

At the Law Office of Simon Goldenberg, PLLC, our attorneys are committed to helping people reduce and eliminate their overwhelming credit card debts. If you need relief from debt, use the form below to fill out an inquiry form, or call us at 888-301-0583.