The holidays are upon us. That means lots of parties, family gatherings, and events… and attending all of those things can really add up! But it doesn’t have to break your budget. Here are some simple steps that you can take for how not to ruin your credit this holiday season.
This post has been sponsored by Lexington Law. All opinions are mine alone and are honestly conveyed.
Don’t put all of your holiday travel on credit (avoid credit card debt)
Holiday travel can really add up, even if you aren’t taking a vacation. Often, we need to travel to visit family and friends over the holidays. Perhaps you are traveling to your parent’s home, where you will be staying over the holidays, so you won’t have to pay for a hotel; however, you may have more travel expenses than you realize with airline tickets, gas for your car if you are driving, eating meals out while you are on the way…
If you know that you will be traveling, try to avoid charging everything on credit cards. Budget out how much you will need and then pay for things as you go. For instance, you will probably use your credit card to buy airline tickets. But you don’t want to wait for last minute reservations—especially over the holidays because you will pay a premium—and it may be hard to find a seat! Get tickets early and make sure to pay them off before Christmas rolls around. Decide ahead of time what will be charged and what you will pay cash for. Maybe you only use the credit card for getting gas for your car and pay cash for meals that you eat along the way.
Don’t open a bunch of new store credit cards to try and save money
Opening several store cards at once can possibly save you some money if you were able to qualify for certain offers, however, this is also lower your credit. Opening up a new credit card means that your credit will be pulled to see if you qualify. Each time a potential creditor conducts a credit check, it lowers your score a bit. So if you want to open multiple new store cards, it could end up lowering your score drastically—and it may take quite a while to raise your score back up. Why? Because new credit lines are uncertain in terms of how the credit reporting companies look at it. Until you have an established payment history with a creditor, and show that you are willing and able to pay your bills on time, your score may not return to the level that it was at for quite a while. Bottom line is, it may not be worth the hit your credit will take just to save a few hundred dollars.
Look at your current credit card rewards and take advantage of those offers
Perhaps your current credit cards are offering double points on purchases or the opportunity to earn additional points for using your card so much within a certain time frame. Obviously, you don’t want to use your card more than you normally would just to achieve a certain level of bonus points for rewards, but focusing any spending you may be doing anyways onto one card might help you earn that bonus! Many credit card companies do offer extra rewards around the holidays, so check with yours to see what you might be able to get.
Look for extras that retail stores or restaurants offer over the holidays
It is quite common for retailers and restaurants to offer deals when you spend so much in their store or even if you buy a certain amount in gift cards. For example, a restaurant may offer a free $10 gift card for purchasing $100 in gift cards. If this is a restaurant that you eat at frequently or could use the gift cards for gifts, then you just earned a free $10. It may not sound like much, but if you plan your shopping around these types of deals, then you could end up with quite a bit of “free” gift cards to spend after the holidays. It’s always nice to get a little something extra for money that you were going to spend anyways…
Stay on top of your spending
Create a budget and stick to it. This is important throughout the year, but even more so during the holidays. It is so easy to make extra expenditures over the holidays for events, parties, and travel that you wouldn’t normally have. Realize that you will have extra expenses over the holidays and budget that in. But once you have accounted for what you feel comfortable with, don’t just use credit to pay for the rest. That bill will come pretty quickly in January, and you don’t want to start off the New Year with a big bill that you can’t pay.
Click here to download your free, printable holiday budget.
Remember to pay your payments to avoid any unnecessary late payments
Even though the holidays are so busy, make sure to prioritize paying your bills on time. Even if they are paid within 30 days of the due date, they will not be reported late to the credit bureau, however, you will incur a late fee. Late fees can range from $20 – $30 or more and can really cost you if you aren’t careful. Just having late pays for two or three cards could account for $50 – $100—and that could have been used to pay for some holiday fun instead! So make sure to open your bills when they come and file them in order of due date. If you will be out of town, you can probably set up online payments or make an early payment by phone so that you don’t miss those deadlines.
If your credit needs repair, get help
Sometimes it is not easy to get your credit back on track on your own. So if you find that you don’t even know where to start with getting old accounts cleared up or what you can do to raise your score, contact the professionals at Lexington Law. A low credit score can keep you from qualifying for the best rates possible, thereby increasing your monthly payments.