The holidays are a time for celebration and spending time with your loved ones. But with all the additional expenses that can come with the holiday season, it can also be a time of financial stress.
Fortunately, there are a number of ways for you to enjoy the festivities without putting your credit at risk. Here are some tips for protecting your credit during the holiday season:
1. Create A Budget And Stick To It
Before you start your holiday shopping, it’s important to set a budget for yourself and list the items you need to purchase. Doing so can help you avoid overspending and prevent you from racking up any unnecessary, often high-interest debt.
2. Pay With Cash As Much As Possible
Credit cards can make it seem like you have more money than you actually have. And this typically leads to overspending. For this reason, you may want to consider using cash or a debit card instead of using your credit card for your holiday purchases.
Not only can doing so help you avoid accumulating credit card debt and ensure that you’re not spending more than you can afford, but it can also help in maintaining a low credit utilization ratio, which is a major credit factor.
3. Be Cautious Of Store Credit Cards
Many stores and retailers offer credit card promotions during the holiday season, including discounts and special financing options. And while these can be tempting, it’s important to carefully consider whether you really need to accept these offers.
Applying for too much credit all at once or in quick succession can hurt your credit. Not to mention that holiday-specific financing options tend to come with high fees and interest rates, which can make it harder to pay them back off.
4. Monitor Your Credit Report
It’s important to check your credit report regularly to ensure there are no errors or fraudulent activity. This is especially important during the holiday season when you may be using credit more frequently, which can make you vulnerable to identity thieves and fraudsters.
Fortunately, you can get a free copy of your credit report from each of the three major credit bureaus(Experian, Equifax, and TransUnion). Note that if you do find errors or fraudulent entries, you can have them corrected by filing a dispute.
5. Utilize Credit Responsibly
If you do decide to rely on credit, such as loans and credit cards, during the holiday season, be sure to do so responsibly. This includes borrowing only what you can handle, making on-time payments, and keeping your outstanding balances low. Doing so can help you avoid paying interest and keep your credit healthy.
6. Keep An Eye Out For Holiday Scams
During the holiday season, scammers may try to take advantage of people’s generosity by offering fake deals that seem too good to be true or requesting donations for fake charitable organizations.
Be cautious of any unexpected emails, phone calls, or online offers, and never give out personal or financial information, as these are some of the methods identity thieves and hackers use to commit credit fraud.
If you do a lot of your holiday shopping online, be sure to shop only on secure websites and use a credit card rather than a debit card. Credit cards offer more protection against fraudulent charges, so you’ll have an easier time getting your money back in the event you become a victim.
The Bottom Line
While it’s normal for spending to increase during the holidays, you should still take extra steps to protect your credit. The reason? You may need to rely on credit in the future and your credit health needs to be prepared for that.
Luckily, there are a variety of ways to maintain and even improve your credit situation. One of these is credit restoration, the process of removing negative information from your credit report.
Call us at 888-799-7267 to schedule a Free Credit Consultation.
