It’s that time of year again. With holiday spending season upon us, it’s time to broach an uncomfortable subject: how to pay for all that joy and goodwill.
The holidays can be an expensive time of year, and it’s tempting to turn to plastic to finance the whole thing. In the spirit of the holidays, let’s look at some “naughty” and “nice” ways to use your credit cards.
Be sure to stay on the right list, or there may be coal in your stocking – and smudges on your credit report!
Naughty: Losing track of your budget
If you don’t have the money sitting around to finance your gift-giving, it can be tempting to pull out a credit card at every store and shop ’till you drop.
Using your credit card is a convenient and often necessary way to fund your holiday gifts, but it’s essential that you set a budget and stick to it. Track your expenses as you use your card to make sure you stay in your guidelines.
A recent study of consumer behavior found that people spend nearly 20% more when shopping with a credit card. The dissociation between plastic and money can erode our ordinarily thrifty impulses, causing us to overspend.
So remember, it’s ok to use your credit card for holiday spending, just be sure you don’t lose track of your budget.
Oh, and by the way, remember if you put something special on a joint credit card, your someone special might see it on the credit card statement! Be sure you don’t end up ruining the surprise on Christmas morning!
Nice: Paying for holiday travel
If you’re traveling for the holidays, it makes perfect sense to use a credit card. Most major credit cards offer insurance for rental cars and extra cancellation policies for flights in case things change at the last minute. Using a credit card to make reservations at hotels, rental agencies and other book-ahead services can also prevent the company from placing a hold on your account as a deposit.
Remember to make a clear budget for your travel plans and stick to it!
Resist the impulse to take frivolous upgrades. Holiday travel is a chance to bond with family, and fancier hotel sheets won’t help with that! Keeping a clear budget will make sure you can pay off that credit card bill next month and avoid costly financing charges.
Naughty: Guilt spending
The holidays are full of messages that connect spending to caring. These messages would have us believe that, if you love someone, you’ll get them jewelry or another extravagant item. Advertisers encourage consumers to make emotional decisions about spending, rather than looking at what they can afford.
Credit cards make this even easier by letting you postpone paying for the gift.
Showing them you care with a thoughtful message and a reasonable gift that’s based on what they want and still fits into your holiday spending budget will be a gift that makes everyone happy. Don’t buy into the myth that dollars are a meaningful quantification of your feelings. Give sensible gifts with money you have.
Nice: Spending rewards on holiday purchases
If you use your Genisys Rewards Credit and Debit MasterCard throughout the year, now’s a good time to cash those points in. Most companies offer discounts on two commodities everyone needs this time of year: travel and gift cards.
You can use your rewards points to help absorb some of the impact of gift-giving. Picking up gift cards this way can make last-minute gift-giving easier.
So what list will you be on this holiday shopping season?
© Genisys Credit Union and www.genisyscu.org, 2017. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Genisys Credit Union and www.genisyscu.org with appropriate and specific direction to the original content.