1. Make a plan ahead of time
While it’s tempting to spend now and worry later, that’s an easy way to accumulate debt. Instead, make a list now and check it more than twice.
Deciding you’re not going to worry about the details until after the holidays can lead to some poor decisions when it comes to credit. The ‘I’ll figure it out later’ mentality—you don’t read the fine print, you don’t keep track of what you spend—is trouble. Then, when later comes, you wish you’d thought about it earlier.
Start by making a list of all the gifts you need to buy so you’re not blindsided by an unexpected addition later in the season. The list will also help you curb impulse buying. Try to set a realistic budget for your spending.
2. Keep holiday spending on one or two credit cards
When you spread your spending out over multiple cards, it can be easy to lose track of the total amount you’re spending—or to forget you charged something to a particular card altogether.
When the bills come after the holidays, you can end up with a very expensive holiday hangover. Instead, stick to one, maybe two, cards to keep track of your balances. If you have a partner and you don’t want them to see what you’ve bought, coordinate which cards you each will use.
3. Shop for a new credit card
Before the holidays might be the perfect time to shop around for a new credit card. Try to look for something with a really low-interest rate, 0% financing or balance transfer, or a new card with a great sign-up bonus.
Sign-up bonuses typically require you to spend a certain minimum amount within the first few months of owning a card. If you know you’re going to be buying a lot of gifts or going on a big holiday trip, it may be the perfect opportunity to quickly earn that bonus. Also, if you’re traveling over the holidays, sometimes a co-branded airline credit card can save your family money on checked baggage fees.
If you do decide to get a new credit card for the holiday season, remember to be responsible with your spending and credit habits when using it, even after the holiday season is over. Don’t miss payments and always pay your bills on time, at least the
minimum payment amount required for each month.
4. Use reward balances to buy gifts
Spend a few minutes going through all your credit cards and airline miles rewards points. Look for cards where you might have small point balances. Maybe you have one that doesn’t have a lot of points—certainly not enough for a hotel reward or something else big. You could cash them in for gift cards or other small gifts that might come in handy for friends, co-workers or other people in your life.
5. Keep track of your spending
Because your holiday spending is out of the ordinary, it can be easy to forget how much you’re spending. Using CTOS app can help you track your credit card expenses, but don’t forget your cash purchases, either. Keep a list on your phone or in an old-fashioned notebook so you know how much money you’re putting toward holiday gifts.