The holiday season is around the corner again, and that means everyone is scurrying to buy gifts for loved ones, friends, and even colleagues at the office. And as each year goes by, the hype that comes with the holiday season grows larger and larger, which can make it a stressful experience for even the most experienced shopper. As such, shoppers probably aren’t worrying about how to prepare their credit and credit card for holiday spending.
To alleviate some of your stress and help you ensure your credit is ready for the holidays, this article shares ways you can prepare your credit cards for holiday shopping this holiday season.
1. Know Your Credit Score
Reducing holiday spending stress—at least financially—starts with knowing your credit score. Knowing your score as you begin your holiday shopping spree can help you and your family avoid financial surprises during and after the holidays. Know your credit score and keep an eye on it. A sudden change can indicate an issue and alert you to dig into your credit reports in order to find discrepancies and dispute them if needed.
Knowing your credit score will also allow you to know where you need to be mindful about your credit, so you can plan your expenses accordingly and work to improve your credit ranking before next holiday season.
So, before you begin hunting for cute matching sweaters for your parents, check your credit score. It can provide you with the needed motivation to minimize expenses that will ultimately affect your credit score. If you intend to apply for a job, a loan or another credit card in the months after the holidays, knowing where you stand now can help you prevent more debt, maxed out credit cards, late payments, and more.
The seemingly insignificant difference between a credit score of 670 and 680 can mean the difference between receiving and not receiving a job offer. And the difference between 710 and 715 can lead saving several hundreds of dollars in loan interest.
Determine a specific threshold that you don’t want your credit score to dip below. When you have a reference, you can work diligently to ensure you don’t drop below that point.
2. Get Rid of Credit Card Debt
One of the fastest ways debt accumulates on credit cards is by failing to make timely payments. A great way to stay ahead of credit card debt is by paying off pre-existing debts before the holiday shopping season begins. You can even look into balance transfers to consolidate debt onto fewer cards. Doing so allows you to avoid facing an overwhelming amount of credit debt to deal with after the holidays. And it lets you shop without worrying going over your credit limit.
Paying off debt also ensure you know your credit card balances before you kick off your shopping. That way, you know how much debt you are starting with.
3. Fix Your Credit If Needed
If you’re in dire need of a good credit score before the holiday season, this is the best time to reach out and begin the credit repair process. Having a good credit score lets you take on as much holiday shopping as you like without having to worry about facing insurmountable debt when the euphoria of the season fades away.
With good credit, you can shop as much as possible with a clear mind and possibly an increased credit limit, meaning you don’t have to worry as much about exceeding your limits.
Having great credit also has other benefits, including better credit card deals and rewards, reduced vacation rental rates, better mortgage rates and better car lease rates.
4. Be Security Conscious
Credit scams are no longer the rarity they once were. These days, we hear all too numerous tales of people getting ripped off as they struggle to restore some sense of semblance to their credit.
Before engaging on a holiday shopping spree, it’s important to make sure another person isn’t using your credit. Review your credit history thoroughly and report any fraudulent purchases or suspicious activity that may have occurred on your account.
There is a higher risk of identity theft during the holiday season, so it is important you learn how to protect your credit before you shop. Some steps you can take to protect your credit include:
- Reviewing your credit history
- Securing your credit card at all times
- Using your credit cards only on secure websites and at secure locations
- Considering using a virtual credit card, PayPal or another payment processing solution where you only share your credit card number once when shopping online
- Enlisting the help of a professional credit monitoring service.
5. Make a Budget
Having a budget before you begin your holiday shopping can help keep you overspending and ending up with more debt than you can afford. For most people, the holiday season is an excuse to overspend, and this usually leads to increased credit card debt.
Because of a large volume of holiday purchases, people lose track of it all causing them to miss payments, and it eventually have their credit scores. To avoid falling into this create, create a budget and stick to it.
6. Use a Rewards Credit Card if You Can
While you pick up presents for others, give yourself a bonus by using a credit card with rewards points or cash-back rewards if you have one. You can then redeem your rewards on yourself or even for others next year. Or you can use your cash-back rewards to pay off your holiday credit card debt.
More Dos and Don’ts to Maximize Your Credit Cards for Holiday Shopping
Do consider using Credit.com to check your free Experian credit score and view your credit report card to know the areas of your credit you need to improve or keep managing just the way you are. With Credit.com, you get an updated score every two weeks.
Don’t let worrying about your credit turn you into a scrooge. If your score isn’t quite where you want, maybe you buy your husband a regular TV instead of the 4K TV he’s been eyeing all year. Or, maybe he just gets an IOU for the 4K TV when our credit score is in better shape.
If you already have a good credit score, keep doing what you’re doing and ensure your score doesn’t suffer too much during your holiday shopping excursions.