Oh, my goodness. Halloween is just a little bit more than a month away and Thanksgiving about two months. You’ll soon be starting your holiday shopping. If you’re like nearly all Americans you’ll be using your credit card(s) for your holiday purchases. According to one recent survey nearly 50% of Americans intended to use their credit cards for their holiday purchases in 2014. There has been no forecast so far this year but it’s likely that a whole lot of us will be using our cards in our holiday shopping and to earn those juicy rewards.
Before you begin your holiday shopping you need to make sure your credit cards are all ready to go and here’s what you need to do to put them through credit card training camp.
Pay down any high balances
You want to make sure you don’t max out your cards during your holiday spending. If you were to do this you might get hit with those nasty over-the-limit charges and also hurt your credit score. So, make a list of the amount of debt you have on each of your cards and then start working on those with high balances. If you have any high-interest (17% or higher) credit cards that have high balances you might consider doing a balance transfer so you could pay them off at a lower interest rate. If you have a good credit rating you could consider transferring all of your credit cards to one of those 0% interest balance transfer cards.
Review your credit reports
It’s always a good idea to get and review your credit reports. You can get yours free from any of the three credit reporting bureaus – Experian, TransUnion and Equifax – or on the website www.annualcreditreport.com. Your report will show all of your open lines of credit, your current balances and your credit limits. You could use this information to figure out which cards would be safe to use this holiday season and those you need to leave in a bureau drawer until you can make a plan for paying off your debts.
Check out price protection
Do any of your cards offer price protection? This is where if you buy something and its price then drops the credit card issuer will give you the difference. As an example of this, Citi offers a 60-day guarantee with what it calls Price Rewind. This would get you a maximum of $300 for each item up to a total of $1200 per year. Do you know which of your cards offers this kind of protection? If so, these are the ones you definitely should use when making big purchases such as a laptop, smartphone or some other pricey electronic device.
Learn your return privileges
If you’re the typical American you’ll be returning things during or after the holiday buying season. This means it’s important to use a credit card that has a return guarantee. This would override the store’s return policy and make it easier for you to take back that sweater you decided you didn’t want to give Aunt Mary or that gift for Uncle Mark you decided just wasn’t appropriate. As an example of this, the Discover Card has a return guarantee that would get you a refund on your purchase price up to $500 on those eligible items if a store refuses to accept your return. However, this does have to be within 90 days of when you made the purchase. Be sure to carefully review your cardholder agreements so you will understand your return rights before you start shopping.
A number of credit cards offer special bonuses and cash back during the height of the holiday shopping season. Take time to understand which of your purchases will be eligible for bonus airline miles, points or cash back. It’s also possible that you could get instant savings via special offers directly through your credit card issuer. As an example of this we will earn 5% cash back this quarter when we buy stuff through Amazon.com using our Chase card.
See if you have extended warranty protection
Will you be making some big purchases such as a new HDTV, a robotic vacuum cleaner, a computer or something else that needs a warranty? Check to see if your credit card has extended warranty benefits. This would save you the added expense of having to buy an extended warranty when you hit checkout. You may have an extended warranty just because you bought something using a specific credit card. Check your cardholder agreements so you will know which cards to use to get extended warranty coverage on those big-ticket purchases.
Get a complimentary credit monitoring service
You plan to use your credit cards frequently throughout the coming shopping season? Then use a credit card where you could get monthly credit monitoring. It’s possible you could get a 30-day trial free or a discount on a monthly monitoring service from one of your credit card issuers. If one of them does offer a free 30-day trial use it to get through the holidays and then decide if you want to cancel before it starts costing you money. The way these services work is they will send you an alert about any activity on your credit report that looks suspicious. These monitoring services can’t prevent identity theft but they will provide an alert so you could then work with your credit card issuer to fix the issue. And this should give you some extra peace of mind when shopping whether it’s either on- or off-line.
Use the ultimate tip
If you follow all seven of these tips your credit cards can be your friends during the coming holidays and make your shopping easier and less stressful. But, of course, the ultimate tip is to have a holiday shopping budget. If you don’t have a budget you could get all caught up in the fun and excitement of holiday shopping only to discover in January that you’ve created a heap of debt. Sit down and create a budget before you do any shopping and then make sure you stick with it. You’ll thank yourself when those credit card bills roll in.