The holidays are in full swing. With Thanksgiving behind us and Black Friday something of a memory, all of our efforts are placed on Christmas. And now that it's only a matter of weeks away, the shopping scramble has begun. Discounts and deals are being thrown at shoppers from every which angle, flooding inboxes and commercials and all of the junk mail that you can barely keep up with. Given this, it's entirely possible that you could catch shopping fever and go on a spending spree.
If this scenario seems all too likely, you could find yourself with some serious holiday debt (and a poor credit score to match). First and foremost, be sure to check your credit score before committing to any new credit cards, deals, or offers this Holiday season. That way you can know how much wiggle room you have with your finances and spending. Here are a few things to keep in mind before foolishly spending on the most exorbitant Christmas gifts:
1) Be aware of your balances.
It’s likely that you didn’t get all of your Christmas shopping done in the months preceding Thanksgiving. And that’s okay. But you should take note of how you are spending and on how many cards. It is recommended that your credit card balances make up less than 30% of your credit limit. This will help keep your credit utilization ratio good.
2) Don’t be tempted by every credit card offer.
Deals aren’t limited to retail and online stores: credit card companies distribute offers and savings, too. And while you may want to sign up for these credit cards due to their offers, don’t fall victim to applying for all of them. Your credit score gets dinged every time you apply for a new card, so applying for a lot of new cards will result in a lot of little dings.
3) Budget, budget, budget!
This one is the most important. It can be easy to get stuck spending on anything and everything for all of the people on your Christmas list. To avoid this, make yourself a list and budget yourself out an allotted amount of money for gifts. You don’t want to end up with copious amounts of credit card debt that could ruin your credit score and produce a negative payment history. And if you’re worried about falling into credit card debt, there’s always cash!
