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Don't Overdo it with Credit Cards This Holiday Season

by Francine Huff

More Americans plan to skip using credit cards this holiday season and pay with cash. A survey by the National Retail Federation found that 71% of consumers plan to use cash or debit cards for holiday purchases. Using cash is smart, but if you are going to use plastic, here are some tips to avoid getting in over your head with credit cards as you eat, drink, and make merry.

Set Up a Budget For Purchases

Whether you plan to buy toys for your kids or golf clubs for your husband, it's important to set up a budget and stick with it. Credit card debt can creep up on you quickly when you don't set spending goals before hitting the mall. Write down how much you can afford to spend on gifts, entertainment, travel, and dining out. Stick to sales and use coupons to avoid wracking up a lot of credit card debt.

Use Credit Card Rewards for Gifts

If you've been accumulating points through a credit card rewards program, it's time to cash them in. Depending on the program you're enrolled in, you can shop for all kinds of things such as gift cards, toys, books, magazine subscriptions, travel deals, etc. Check the expiration date for credit card rewards points to make sure you don't lose them.

Pay Credit Card Bills on Time

Don't let yourself miss a credit card payment deadline because you're too caught up in all the holiday festivities. Open your credit card statement as soon as you receive it so that you are fully aware of the deadline. Also, watch for mailings that change the credit card terms.

Avoid Credit Card Cash Advance Offers

Credit card companies often mail out cash advance offers just before the holidays. While you may be tempted to use offers that feature low credit card rates for a period of time, it's best to avoid doing so. If you accumulate too much credit card debt using a cash advance offer, you may not be able to pay it off before the low rate expires.

You can enjoy the holidays without relying on credit cards. Why stress yourself out over buying a lot of stuff you really can't afford? Instead, have a simple holiday that revolves around spending quality time with friends and family. Leave the credit cards home, as much as possible, and only buy what you need.

Published 12/15/10 (Modified 11/20/13)


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