Set yourself up for financial success with these holiday credit card tips!

The holiday shopping season is here! Although shopping with credit cards can be a great tool to build credit, it’s easy to overspend during the holidays.

DO Determine Your Budget When Shopping with Credit Cards

Carrying a high balance on your credit card may reduce your credit score. Your credit utilization ratio (how much of your available credit you’re using) plays an essential role in determining your credit score. To avoid maxing out your cards and better track your spending, download our, “Monthly Home Budget Template”.

DO Be Wary of Applying for Store Cards

As tempting as it may be, be cautious of applying for store credit cards. Many store cards have higher interest rates than regular cards. Additionally, every time you apply for a credit card, a financial institution makes a credit inquiry to determine your eligibility.

DON’T Ignore Your Credit Card Statements

Resist the temptation to deal with your credit card balance until after the New Year! Set yourself up for financial success in the next year by reviewing your statements for accuracy. Pay off as much of your balance as you can reasonably afford based on your monthly income and expenses. Quickly pay your bill so you accrue less interest on your purchases.

DO Only Spend What You Can Afford

According to CNBC, when you pay with a credit card, it’s easier to spend more than if you pay with cash since you’re not handing over any physical money. Try setting boundaries for yourself by setting up spending limits and checking your balance daily.

DON’T Max Out Cards

Carrying high balances on your credit card may reduce your credit score. Your credit utilization ratio (how much of your available credit you’re using), plays an important role in determining your credit score. To avoid maxing out your credit cards, follow these tips:

  • Choose one credit card to use rather than maxing out multiple cards. Review your credit card rewards and consider using the card that offers the best rewards for your financial situation.
  • Track your spending habits to ensure you’re on budget. Monitor your credit card balances online, or through your credit card provider’s app. Consider setting up text or email alerts when your balance reaches a certain level.

DO Redeem Your Rewards

Many credit cards offer rewards cards or loyalty programs that you can use to offset the cost of some of your holiday gifts. Check if your credit card is offering any cash back bonuses that you can earn rewards for and apply to your statement!

Make sure to keep these holiday credit card tips in mind while shopping this season. If you have any questions about your credit, or if you’re in the application process, contact one of our expert team members today!