In the leadup to the holidays, your credit can take a wallop. Not only are you spending more than usual, but you’re also exposing your credit information with each online purchase you make.
While you may have your mind on other things during the hustle and bustle, it’s a good idea to check-in with your credit throughout the season. These money management tips will help you keep your finances safe.
1. Draw up a Budget
The first thing you want to do is check in on your finances. You need to know what’s going on with your money before you can handle the holiday bill.
This is an especially helpful step if you’re already struggling to make ends meet before the festivities enter into the equation. A budget can tell you what to do when you can’t pay the bills.
2. Set a Spending Limit
Once you get your financial house in order, you’re ready to focus on setting a holiday spending budget.
If it ends up being tighter than you thought possible, look into ways to shave off costs from the typical holiday expenses. Suggest a potluck dinner and a secret Santa gift exchange with your family this year, and download the web extension Honey to help save money on each purchase you must make.
3. Don’t Borrow Money
While it may be tempting to dip into a credit card or line of credit to boost this limit, holiday debt has a long shelf life.
According to MagnifyMoney’s post-holiday debt survey, nearly half of people would take more than three months to pay off a loan, line of credit, or credit card they used for the festivities.
Carrying over a balance is never a good idea, as you’ll have to pay interest on this amount. You may also see your credit score suffer, as you’ll carry a larger credit utilization rate.
As an added note, some of these products aren’t designed for the holiday. Only use an installment loan or line of credit for unexpected emergency expenses — not planned shopping trips.
4. Treat Your Credit Card Like it’s Cash
In 2020, shelving your credit card is a tall order. In some cases, it’s the only way you can snag deals that fit your budget or book a rental car. It’s also a healthy option if you choose to avoid crowded malls and shopping centers.
With this in mind, your credit card will likely join you on your online shopping trips. If you do, pretend it’s cash. This simple rule will help you avoid overspending and carrying around debt for months.
5. Monitor Your Accounts
You know how it is — when you’re on the lookout for the best deals, you’re scouring parts of the web you probably haven’t seen before. You’re even paying attention to your inbox full of marketing emails promising the best deals of the year.
Scammers take advantage of this frenzy, hoping you’ll be too worried about shopping to notice you’ve clicked a suspicious link or shared your info when you shouldn’t.
Everybody makes mistakes, so it’s a good idea to keep a close eye on your financial statements. Go through them line by line to ensure nothing is out of place. If you spot something suspicious, contact your credit card company right away and a run credit check to ensure nothing else has been hacked.
Keeping tabs on your credit is easy — just follow these tips to ensure your holiday spending fits your finances this year.