December 11, 2020
Credit Card Tips for Stress-free Holiday Shopping
Shopping is on lots of people’s minds this time of year. With so much enticing merchandise and all those sales grabbing your attention, it can be hard to keep expenditures under control, particularly when using a credit card.
Though it doesn’t sparkle or smell like nutmeg, being smart with your card now will be a gift when the bill comes. You’ll save money and perhaps your credit score too. And reducing the stress that comes with overspending will make a more joyful season for you and yours.
Take stock of your credit situation.
Do you have a credit card balance you haven’t been able to pay off? Avoid adding to your debt and incurring more interest. If you can pay that card balance or at least pay it down, do. In any case, spend only what you can afford in full without taking on additional debt.
And consider transferring your balances to a low-rate card. You’ll be able to pay down your debt faster and slow the rate at which you’ll incur interest.
Make a shopping list. (Check it twice if you really want to.)
A list and budget are key. Use whatever medium you’d like, whether it’s a piece of paper, a note on your mobile device or a spreadsheet. List each person’s name, a gift idea and the maximum amount to spend. Be sure to include the tax and any shipping cost. For brick-and-mortar excursions, add a line for gas and food during your shopping. And don’t forget any tips, decorations or refreshments you’ll need at home.
Be sure all the items on your list only total what you can afford to pay in full in a month! If necessary, make adjustments. Try your best to stick with the list, especially the spending amount.
Of course, there’s a decent likelihood of stumbling across something perfect for one of your “giftees” while you’re shopping. It’s okay to purchase it as long as it doesn’t cost more than you budgeted to spend for that person.
Use a credit card with points.
If you’re going to be shopping, you may as well rack up points for a future trip, cash back or that special item you’ve been wanting. Some cards offer bonus points for certain categories or for all purchases, which can help you maximize the power of your purchase. For instance, if you usually spend $200 for the holidays and get 1 point per dollar spent, that’s 200 points. But getting three points per dollar spent is 600 points for the same $200 spent.
But don’t think that extra points will make up for reckless spending! Additional money spent, debt and interest (see tip #1) will most likely eclipse the value of those points and then some. Think of points as a bonus for smart shopping, not a reason to shop.
Monitor your accounts.
It’s important to keep a watchful eye on your accounts during the holidays (and anytime). Some financial institutions like The Summit regularly monitor credit card accounts for suspicious activity. It’s a smart idea to also take advantage of extra layers of fraud protection such as The Summit’s Card Controls and Purchase Alerts.
With Card Controls, you have the ability to easily and quickly pause, or turn off and on your card. And Purchase Alerts will caution you about transactions that meet criteria you set, such as those over a certain dollar amount, foreign charges, gas charges and more. As always, it’s wise to regularly check your card’s transaction history yourself to be sure you recognize all the charges.
More Tips for Saving Money During the Season
It’s easy to get starry-eyed looking of photos of hallways with green-and-red rug runners, bedrooms with reindeer sheets and living rooms loaded with wintery pillows. But do you need to re-do your home with special seasonal everything? How often will your family wear those matching elf pajamas?
You can have a perfectly festive holiday without purchasing anything new for yourself or your home. That way, the holidays will be more about people and less about themed knick-knacks. And who wants more items to store, anyway?
Re-gift and recycle.
Secondhand shops are great places to find presents. Name-brand and items with original tags can be found for a fraction of what they’d cost at a regular store.
And re-gifting, though it gets a bad rap (wrap?) is a legit way to give. If you’ve received something that isn’t your taste, but is just the thing for someone on your list, have at it and wrap it for them. Just be sure to remove any tags personalized to you!
Another option is to find something you’ve owned for a while but no longer want. Does Aunt Vivian collect candlesticks? Give her those glass ones collecting dust on your shelf.
Find no-cost gifts.
There are lots of ways to give without spending a mint. Think personal. Make a coupon book of things you’ll do together: take a hike, watch a show on TV or do a craft project.
Create something yourself. Find items you already have around the house and make something unique. Make baked items or offer to make them at a later date. Or write something just for that person: a poem or short story, for instance.
This article was originally posted on The Summit Blog in December, 2019.
Cynthia Kolko, The Summit Federal Credit Union