6 Ways to Avoid Getting Scrooged by Credit Cards

It seems that the holidays are the season for which credit cards were made. You see, credit cards, unlike their cousin the debit card, may lend a little breathing space between when you buy something and when you receive the bill. If you are not careful though, they can become an unfortunate burden on your finances.

And so, here are a few tips to make your credit card spending more joyful.

#1   Don’t Open a Card “Just for the holidays”

Retailers and credit card companies expect this holiday season to be a downer. To entice you into spending most card companies are running some rather sweet promotions. But, this isn’t the time to let your emotions rule your wallet. Opening a new card “just for the holidays” is like poking your finger in the back of  the chocolates in the Whitman’s sampler. It only leads to more mess…for your credit report. This goes for not only the big cards, but store cards as well. Every credit card application is a ding to your report and every card you carry makes it that much harder to control your spending.

#2   Understand Your Billing Cycle

Since the whole reason you are using a credit card in the first place is to buy now and pay later, you’d better understand how soon later will come. If your billing cycle ends tomorrow, then maybe you should just pay cash for the thing.

#3   Watch Your Credit Limit

Running a balance close to your credit limit or going over your credit limit are big boo-boo’s to your credit report. Before you start shopping know how much spending power you have.

#4   Avoid Cash Advances

Cash advances typically are charged at a much higher interest rate than purchases. If possible avoid taking a cash advance on your credit card. HOWEVER, if you are strapped for cash, a credit card cash advance may be your best or only option. Weigh your options first and choose the most cost-effective path.

#5   Don’t Be Foolish for Rewards

Rewards programs are often sweet, that is if you are purchasing because you want to make a purchase and not just for the rewards alone. Be sure to look at the real cost of rewards points. Some programs require you to charge much more in purchases than the value of the reward. It’s all fine, if you aren’t charging the item just to reap rewards. A reward should be a nice bonus, not a goal.

#6   Stick with Your Budget

Do stick with your spending limits. Just because you can pay the card off later, doesn’t mean you should spend more than you can afford. Remember the spirit of the season is to show your appreciation. No one wants to see you burdened by gift giving.

Cheers!

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