Tis the season to be shopping, but you can’t let all your holiday spending hurt your credit score. This holiday season, stay in control of your credit score with these helpful tips. Spend smart, use your credit responsibly and enjoy the holidays!
6 Ways To Maintain A Good Credit Score During The Holiday Season 2017
- Check Your Current Credit Score & Clean Up Your Credit Report
- Settle Up Current Credit Card Balances & Know Your Credit Limits
- Set a Budget Based On Your Credit Limit And Ability To Repay On Time
- Spread Your Spending Across Different Credit Cards
- Prioritize Older Credit Cards & Only Cancel Newer Cards
- Don’t Sign Up For “Free” Store Credit Cards
Before using your credit cards to finish your holiday shopping list, you should check on your current credit score. You can get this information for free from several websites, including Experian, Credit Karma and AnnualCreditReport.com.
Thoroughly check all of the accounts and debts listed on your credit report. Are there any charges that you don’t recognize? If you suspect any errors or false claims on your credit report, you can contest them.
Along with knowing your credit score and removing any errors, you also need to check on the balances of your credit cards. Check to make sure that the charges are accurate. Ensure that your payments have been received. Keeping a close eye on your credit card balance encourages you to pay your bills on time.
If you have any outstanding debt on your credit card, pay as much of it down as you can. It’s okay to leave some debt from month-to-month, as long as you can avoid high interest fees. Maximize your holiday spending flexibility and try to free up as much room on your credit cards as you can.
While settling up previous credit card debts, take note of the credit limits on each card. Know the different interest rates for each card and when they go into effect. These factors will influence how much you use each card and for what amount of spending.
You may have a lot of people to shop for, but having a credit card doesn’t give you an unlimited budget. When the holidays are over, you’re going to have to pay your credit card bills. That’s why you need a solid spending and remuneration plan.
Start with figuring out how much money you can actually afford to spend on gifts and other holiday fun. Determine this figure by looking at the spending money you have on hand and any expected monies you have coming to you (i.e. future pay checks, end of year bonuses, etc.) Use this information to decide your budget.
Now, figure out how much you can borrow and how long you need to repay. Every 30 days, you have to make payments on your credit card(s) or you risk penalties and/or a ding to your credit score. Calculate how much time you’ll need with the money you have available and coming in.
Create a payment plan that you can follow – what cards need to be paid, how much you need to pay, and when that payment is due. Stick to this schedule and you will maintain a good credit score this holiday season.
Rather than putting all of your borrowing on one card, it may be a good idea to spread your borrowing across several credit cards. This is an effective way to keep your borrowing at 30% or less of your credit card’s limit.
While shopping, changeup which credit card you use with every day or two of purchases. If you’re getting all your shopping done in one day, alternate cards between every other store.
By limiting how much debt you charge to a single card, you decrease your chances of exceeding your credit limit. The only tricky thing about spreading the spending across multiple cards is keeping track of multiple repayment schedules. That’s why it’s extremely important that you have a holiday spending budget and a repayment plan.
The longer you have a credit card, the greater impact it has on your credit history. If you do the majority of your holiday spending and payments on your oldest credit card, you can improve your overall credit score.
If you have to cancel a credit card, cancel your most recent ones. When you cancel a card, you also remove the credit history from your credit report. So, if you were regularly making on-time payment on a credit card, but then you cancelled it, this good behavior would not be reflected on your report.
Credit cards issued directly from a store are notoriously some of the worst credit cards you can get. They usually have high interest rates, low credit limits and can essentially only be used in one place. Avoid these credit cards.
Many retailers will tempt you with different incentives – such as a same day coupon or gift certificate. Don’t give into temptation. Chances are signing up for a new credit card during the holiday season isn’t part of your budget or repayment plan. You don’t want to deviate from your plan just for a free gift.