4 Bad Credit Card Habits to Break This Holiday Season
This is a guest post from Dave Sullivan of Credit Technologies, Inc.
It’s hard to believe the holidays are already here. With the hustle and bustle of Black Friday days away, it’s time to start preparing your holiday shopping budget. While the holidays can be a tempting time to conveniently charge special purchases, be careful to avoid making these four credit card mistakes.
- Don’t pile on more than you can pay off. It’s the simplest rule in the book, but one that can be difficult to follow—especially during the holiday season. It can be tempting to charge special purchases this time of year, but it’s best to think twice before you swipe. You may need to use a credit card during this time to help with larger purchases, but no one wants to leave the holiday season with a financial burden. Budget for what you can afford and have a goal to keep your credit card balances below 49% of the total available credit limit. After the holidays try to get your balances paid down to 5-9% for the best credit score possible.
- Don’t max out your credit card. Instead of charging all your purchases to one card, it’s a smarter choice to spread out your purchases over a couple credit cards. Not only will this help stagger when payments are due, it will minimize the negative impact on your credit score. Again, the key is to keep each balance below 49% of the total available credit limit.
- Say no to holiday credit card gimmicks. Almost every department store has a credit option for you, and they aren’t afraid to offer you a “deal” as an incentive for you to sign up on the spot. Try to avoid opening new cards during the holidays, especially if you plan on buying a home in the near future. Opening too many new credit cards can have a negative impact on your credit score and your ability to get a loan. Worse yet, don’t open a new credit card and close it right away. This can have an equally damaging affect on your credit score.
- Pay attention to your online shopping. It’s almost too easy to shop online. With the click of a button, you can easily shop from the comforts of your home and send a gift to a friend. Make sure if you’re shopping online you’re still aware of your spending decisions. Record every purchase you’re making so you don’t go over budget. When shopping online, be sure to only use one credit card just incase there is a data breach, then you only have to get one new credit card.
We hope you’ll remember these tips as you start shopping for special friends and significant others this holiday season. Avoiding bad credit card habits can put you on track for a happy holiday season and a financially sound New Year!
Don’t forget to check out these do’s and don’ts of using credit cards during the holidays, too.
With more than 20 years of experience providing credit reporting solutions to financial institutions and mortgage lenders, Dave serves as the Marketing Director for Credit Technologies and on the Board of Directors of the MMLA. He also provides credit tips on his video blog, http://www.thecreditguy.tv.