During the holidays, even the most frugal spenders can find themselves splurging. While increased spending is expected, and even appropriate during a celebratory season, it’s important to create and keep boundaries with your credit card. Once presents have been unwrapped and decorations become fewer and farther between, not having to worry about undoing holiday wallet damage or flinging into new, strict financial habits makes the new year much more appealing.
Though it can be like looking in an intimidating mirror, checking where your credit currently stands gives you important base knowledge before you make your shopping list and budget. Being aware of your credit score and reviewing the status of each credit card you have is a great way to be mindful of your situation before making additional charges to your account(s).
It’s always important to plan ahead, but especially so when using a credit card. A few swipes here and there that you forgot to account for can add up. To prevent overlooking any necessary purchases, write out what you plan to buy for others and how much of your budget is allocated to them. Don’t forget to tally up the non-gift purchases, like baking supplies or travel costs. Analyze how the total fits into your budget and adjust your numbers accordingly.
You’ve heard it before, but it stands true: review your previous spending to find recurring purchases you can go without. This frees up some expenses for the holiday season and reveals how important those habitual purchases really are. Then, prepare a plan for paying off the upcoming holiday expenses. Consider whether you’ll pay in full right away or over a series of payments, and whether those will be automated.
Exploring the possible benefits of your credit cards can give you more tools to take on the holiday season. Using your card wisely to receive cash back, rewards points, extended warranties, and return protection can not only help you spend less money, but also ease the process of possible gift returns and exchanges. You can also consider raising your credit limit to keep your credit utilization rate relatively low. However, this wiggle room is no excuse to spend excessively and can be a slippery slope if you aren’t careful.
With social media algorithms and sales promotions flooding email inboxes, it can seem as if we’re constantly mentally shopping. Combat this by prescribing specific time blocks to hit the stores or online shops with your credit card. When you are out and about, don’t sign up for new retail credit cards at the checkout counters. Most importantly, compare different prices of a gift or versions of a product before settling for the first option you see. Not only can this save you money– but you’ll be more likely to find the variation that your loved one would prefer.
With a general increase in transactions and donations during the giving season, it’s important to beware of charity scams, fake purchasing orders, and phishing messages claiming to be companies you buy from. To keep track of legitimate purchases, link your credit card to text alerts that will notify you whenever your card is being used. As always, never give your credit card information to someone who has contacted you; instead, go to the source yourself.
Although financial planning doesn’t add to the magic of the holiday season, it takes the spotlight off spending and puts it back on celebrating. Using your credit card with integrity gives you the confidence to give the best gifts guilt-free.