‘Tis the season to take out your credit card and shop at the nearby mall to get all of your Christmas shopping completed. Unfortunately, this usually leads to an enormous credit card bill by the end of January. This is why a large percentage of people get the winter blues at that time of the year.
A new infographic by Landmark Cash found that nearly three-quarters (72 percent) of people have at least one credit card and 20 percent have four or more cards – only seven percent were rejected for new cards. In addition to the large amount of credit cards, the average debt per adult is more than $8,000.
Most financial experts will urge consumers during this period of the year to put away the plastic and only bring with you to the store a list, cash and a level head; in other words, spend within your means and don’t get carried away with buying gifts for your friends, family and colleagues. However, consumers can use credit cards if they do so responsibly and wisely.
Here are five credit card tricks to employ for the next few weeks while you shop in stores or online.
Cash back rewards
If you’re one of the many Americans who own two or three credit cards, be sure to opt for the one credit card that has cash back rewards, which are usually heavily promoted around November and December. The rate is likely one point for every $1 spent, but during Christmas that number is sometimes increased to five points for each dollar.
Furthermore, companies will offer you bonuses for using these kinds of credit cards.
Indeed, this requires self-restraint and responsibility. Before you embark on a journey of consumption, create a list of gifts you wish to buy and set up a spending limit. As you continue your shopping trip, write down how much you have spent and how much more you have left. By doing this, you’ll have less debt to worry about come January and February.
0% intro APR
For many, the Christmas season can be a stressful time because they know they will be spending an astronomical sum of money, which equates to a heavy debt load. Therefore, if you know this ahead of time, it would be prudent to find a credit card that has a special zero percent introductory APR – there are numerous reward credit cards that have a six-month zero percent intro APR. Take advantage of this to avoid the interest charges on a $500 bill.
Reality, or how I learned to buy inexpensive gifts
Unfortunately, this is the season that we forget about the thought and only worry about the price-tag of the gift. At the present time, the economy isn’t going too well and the cost of living is soaring. When you shop, buy only what you can afford even if that means the gifts are inexpensive or cheap. There is no reason to go beyond your means for only one day of the year.
If it is at all possible, pay off large chunks of your credit balance each week before the following month’s bill comes in your mailbox (or inbox). It’s better for you at the end because you can focus on saving and investing or allocating your money into other debts, such as a mortgage or car loan.