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The Credit People

The Credit People

Tips To Make Your Holiday Shopping A Success!

The holidays are a great time of year. It’s a time to be with family and friends and to celebrate. A big part of the celebration is buying gifts for one another. If we’re not careful, though, we can add expense to our personal finances that really put us in the hole for the coming year. We can avoid that pain if we just follow the steps pulled together by your friends at The Credit People.


For Online Shopping Only Use Secured Sites


When shopping online make sure the site is secured. You can tell it’s secured by the beginning of the URL – does it have HTTPS or only HTTP? The S in HTTPS stands for ‘secure’ and you want to make sure it is present if you’re going to make an online purchase. The HTTPS protocol encrypts the communication between your web browser and the website you’re shopping on. Without this additional level of security it’s much easier for hackers to get to the personal data you enter for your purchase. 


Older couple shopping online

Avoid Use Department Store Credit Cards


It’s easy be to enticed into obtaining a department store credit card while out shopping. Often at the register while ringing up your purchases they’ll ask, “Would you like to save an extra 15% on your purchases?” And with most of us our natural first response is – “Of course!” But that’s generally a one-time offer that doesn’t provide a great deal of overall savings. Further, the finance rates for purchase balances on these cards can be substantially higher than a regular credit card. With very limited utility – can only use them at that store – and a very high cost of use, it’s best to avoid the department store card and pay cash or put it on a conventional credit card, where the finance rates tend to be more reasonable.


Stay Away From Extended Warranties


Also at the store register you may be confronted with the question whether or not you would like to purchase the “extended warranty” with that product. This is often offered with things like electrical equipment, and provides additional insurance if the product happens to breakdown during the warranty period. It’s generally a good idea not to buy these. They tend to be expensive relative to the protection they offer, and are limited in the coverage they provide. Rather than adding the extended warranty most consumers are best to just go with the manufacture’s warranty for coverage on their new purchase.


Overdoing It During The Holidays


Generosity is a hallmark for the holidays. In many ways it’s this spirit of giving that make the holidays so special. There’s no doubt that giving to your loved ones has a somewhat intoxicating effect. Few things feel better. But that intoxication can definitely lead to a hangover -- a financial hangover, figuratively speaking.  If you don’t spend within your means during the holidays, and instead use debt to finance your gift giving, you might find you need to dig yourself out in the new year that follows. Don’t let that happen. Start the new year on high note instead. Spend within your budget. Leave the over the top gift giving to Santa – that’s his thing!


Santa on back with presents

Buying Decisions And Reward Points


It’s important to know what reward points your credit card is offering and take advantage of them when it makes sense. Reward points are a nice bonus when they come along with prudent purchasing. The problem comes when you let your purchasing decision become overly affected by them. If fact, that’s exactly what the credit card companies want you to do. They are using reward points to influence your purchasing choices as much as possible. This is great for them, but may not be so great for you. Buying based on reward points can lead to over purchasing and much higher levels of debt. Don’t let reward points be a primary part of your purchase decision-making.


Don’t Get A Cash Advance


For certain occasions during the holidays cash is needed to pay for items – like tips, parking, etc. Be sure to use only cash from one of your saving or checking accounts. Don’t take a cash advance from your credit card. Doing so automatically immediately adds debt to your financial life. Unlike a purchase on your credit card, which only charges interest on your unpaid balance, cash advances charge interest immediate after you receive the money. Also, the finance charge on a cash advance can be substantially higher than what is charged on a purchase – sometimes almost double the rate. Definitely stay clear of getting cash advanced to you through your credit card.


Pay It Off


Using credit cards to make a purchase is a real convenience. Never need to worry about having enough cash on-hand or having to bother with excessive change. Simply insert your card, scribble your name, and voila you’re done. The problem comes if you don’t pay off your entire balance with your next statement. Finance charges! Don’t use your credit card as a source for a short-term loan. Pay off your balance in total as soon as they come due. That way you keep your expense for holiday purchase to just the cost of the gifts you buy.


Follow the holiday shopping tips above and we know you’ll have a great holiday, but also a new year with much less stress over additional debt. 


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