With Christmas and New Year’s soon approaching, it is that time of the year where we celebrate with friends and family. Gifts are a big part of any festival but with Christmas, we all want to let loose our purse strings. From toys, books, and clothes, to jewelry, holiday packages, and electronics, our shopping lists seem to have it all.
One of the easy ways of paying for purchases during this festive season is credit cards. Using your card to shop could mean less impact on your savings. Whereas the downside could be incurring a large holiday debt. Here are a few tips on how to best use your credit card to shop for Christmas gifts, and what you should look out for.
Set a Budget Before You Start Shopping
It is very easy to go on a shopping spree, especially with stores offering exciting discounts on various products. To avoid spending more than you can afford, you need to make a budget and stick to it. This is important while making purchases with a card because of high credit limit. You will need to resist the temptation to buy that expensive dress or smartphone, no matter how great the offer seems.
While making a spending budget, always refer to your shopping list. It won’t make sense if you set your budget very low and end up not being able to buy most items. While the opposite is also true. A lavish budget might tempt you to buy things that are not on the list.
Another aspect to consider is that your budget should match the amount you will end up within your savings account after the holiday season. You should make sure that you have at least 50% of your spending budget as disposable income the following month. This way it will become easier to pay off your bill without incurring debt.
Card Rewards and Promotions
Most credit cards offer benefits like cash back or reward points on certain spend categories. One of the way of saving on your purchases is to look at the rewards that your card offers. If you have a card that gives you cash rebates on shopping, make full use of it. Understand the terms and conditions of the card, and use it to your advantage. The same holds true for cards that earn you reward points.
While cash back and reward points can help you save on your Christmas shopping, you might want to consider your travel credit card. If your card gives you air miles on retail purchases, you can reap the benefits on your travel plans. Since airfare is expensive during the holidays, you can redeem your air miles for a discount on your ticket. Flying home to meet your family or setting off on a holiday can become more affordable for you.
In addition, you can also take a look at the credit card promotions being offered by your bank. Utilizing offers like discounts on clothing, beauty products, and others will definitely help you stick to your budget.
While card benefits and promotions can help you save on your shopping, you need to keep in mind the associated terms and conditions. Certain cards have a cap on the reward points or cash back you can earn. It wouldn’t make sense to use your card injudiciously hoping to earn big rebates if there is a cap. Calculate your spend amount according to wisely to make the most of the benefits offered.
Utilize Your Accumulated Reward Points
If you have a rewards card that you use regularly, you may have earned a fair few points. You can redeem these points for gifts and other goodies. Take a look at your bank’s rewards catalog, and use your points to buy them. This way you will be able to strike off a few items on your list. In addition to merchandise and gifts, most banks also offer shopping vouchers that you can use to buy gifts. Before you set out on your shopping expedition, check out the gifts and goodies being offered by your credit card issuer.
Store and Online Shopping
Most merchants offer amazing discounts during the Christmas season. You can compare the various deals being offered to choose one that will help you save the most. Don’t limit your shopping to stores. Check if your card rewards you for online shopping, and shop smart by combining the merchant discount and the benefit offered by your card.
Another way to maximize your savings is by shopping at partner outlets. Some merchants offer additional discount and exclusive benefits if you pay using a certain card. Always inquire if the store you want to shop at is one of your bank’s partner merchants.
Store Credit Cards
Do you like shopping at a particular store? Your loyalty to a brand can help you get exclusive discounts and other rewards if you have a store credit card. While each store offers different benefits to their cardholders, each small reward will go a long way in bringing down your expenses. A store card is an excellent way of multiplying your rewards
If you don’t yet have a store card, you can consider applying for one. Look for a brand that you really like or one that offers a wide selection of products. This way you will be able to shop for most items on your list under one roof.
While considering applying for a store card, it is important to check the rate of interest and other fees and charges. It can be easy to get carried away by the privileges, but remember that they come at a cost.
By shopping smart this holiday season, you could get all the things you wanted while saving on your expenses. In all the excitement of Christmas and New Year’s, don’t forget to have a strong repayment plan to cover your expenses. It is particularly important to keep a tab on your spending during this time because it is easy to fall into debt. Holiday debt can bring down your score and make it difficult to apply for new cards and loans. Ensure that you pay off your bill as soon as possible. All your savings will not amount to anything if you end up paying interest on your purchases, month after month.
Do you want to apply for a card to save on your Christmas shopping? You can visit a financial site to compare different cards and their benefits. This will help you choose a card that works best for you.