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Using Credit Cards Responsibly for Holiday Shopping

With the holiday season comes the temptation to spend more that we can afford resulting in debt that limits your ability to achieve other financial goals in the coming years, but with a little planning this doesn't have to be the case.

When Should You Charge It?
Sometimes it's actually better to make a purchase with your credit card than with cash or a check. That's because credit cards often come with a special insurance feature that covers you if your purchases are damaged or stolen, which is particularly useful when your new TV arrives from the store with a cracked screen. Check the terms of your card (you can read the application literature or call the customer service line) to see if you have this coverage. Your credit card issuer may also play intermediary if you ever have a dispute with a merchant over the delivery of the goods or services you've bought.

For the most part, credit cards are also considered safer and more convenient to use, especially if you're traveling during the holidays. Why worry about losing your money or having a personal check rejected when you can carry a single piece of plastic that's accepted most places and can be canceled if lost or stolen? If you make purchases online, your credit card can provide protection against Internet fraud, too.

Avoid Common Credit Card Pitfalls
The biggest mistake people make with their credit cards is overusing them, which is easy to do whether you have one card or a whole wallet full of them. You can avoid a credit crunch by following certain guidelines you set for yourself. For example, you may decide to have only one card to do your holiday shopping with a very manageable limit so that you can't overspend. Or you might decide to use your card only for emergencies or things you can't pay for in cash (an airline ticket bought by phone, a tow for your broken-down car, an auto rental, or an online purchase, for example).

Think twice before accepting retail store cards during the holidays. Though they often come with a tempting merchandise discount, they also tend to charge higher interest rates than the kinds of credit cards that can be used anywhere. Why add another card to your wallet, especially one that has limited usefulness? Not only does it tempt you to spend, it also makes you that much more vulnerable to credit card fraud.

BECU offer free financial education to help you make wise credit decision. To learn more visit BECU debt and credit financial education articles.

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