The best management strategy will largely depend on what your current financial situation is. For example, people who are building credit should use their credit cards differently than those who are aiming towards credit card debt elimination. Credit builders may want to show a revolving history of personal responsibility, so charging your entire holiday purchase may be appropriate.
However, those with a high debt load may be better served to use their debit card. If you do go that route, be sure to have it run as a credit card to ensure that all the fraud protections are in place. You could also use a standard credit card, keeping the cash on hand to pay the bill when it becomes due. If that isn’t an option, make a budget that accounts for eliminating the holiday debt completely within four to six months.
There are other things that you may be a factor in your lifestyle and situation that you can take into consideration when managing your holiday credit card debt in an efficient manner. The first thing to look at is what type of credit cards you own. If you have several, you might want to favor the one that offers rewards.
Because holiday debt usually adds a large chunk to the balance at one time, you can earn significant rewards. Keep in mind that many rewards cards give users a bonus for shopping with affiliated retailers, so be sure to favor those stores when you are out and about. Also, don’t forget that your rewards won’t post to your account until the balance is paid, so work that into your financial plan.
Another type of card to consider for holiday shopping is the store-issued credit card. You can usually receive a discount or cash back just for signing up for these and can save on each purchase made as well. However, don’t take advantage of these offers unless you are in a sound position. These should be paid in full every single month, as the interest charged is generally excessive. They can, however, be a good idea if you manage them efficiently.
The holidays are a time when many people are traveling. What better time to catch up with family and friends, after all? If you are leaving home, you need to keep a close eye on your credit cards and use smart strategies. It is recommended that travelers always use credit cards.
Debit cards just don’t have the same protections in place, and it could be weeks before you are keeping a closer eye on the accounts that you have left at home. In addition, using a debit card to book hotels or rent cars can cause your bank balance to be held for a period of time. When using a credit card, it’s your credit limit that is affected and not your personal cash.