Key mistakes to avoid with holiday financing and credit purchases

With the holidays approaching quickly it may be tempting to take unnecessary financial risks to ensure that everyone has a happy holiday. There are, however, a few key mistakes that you should avoid at all possible costs. Everyone, at one point or another, has felt the post-holiday debt blues. It can be quite a let down from the joy and excitement of the holidays. By following a few guidelines you can make those post-holiday blues a little brighter. And save your credit score in the process.

First and foremost don’t spend too much money. You should make a holiday budget and stick to it. Take your time and make sure you include all expenses for the upcoming holiday. It is easy to get caught up in the holiday spirit and spend way more than you meant to. It may be necessary to make a list and keep up with how much you have spent to make sure that you do not go over budget while you are shopping. This way, no matter who you are shopping for, you won’t be as easily tempted to buy “just one more thing” for a person that you have already finished shopping for. A list can also help you avoid forgetting to buy for someone.

These days, every retailer around seems to offer a store credit card with an initial percentage off of your first purchase. If you are shopping at several stores and they offer you this, it may be tempting to accept at each store. The initial savings are great, but your credit score can suffer if you open up too many revolving accounts in a short period of time. The other pitfall is these cards often times have high interest rates that can eat up those initial savings quickly. Many people don’t think that several new store credit card payments coming in at the same time of the month can quickly ruin your regular monthly budget, perhaps forcing you to seek a loan or other finance avenue which could put you further behind the eight ball with your money going into 2014. Try to use the cards that you currently have and forgo the temptation of enjoying the initial savings offered by store cards.

Another mistake people often make around the holidays is running their balances up too high. If you can keep your balance under thirty percent of your credit limit it really helps your credit score. If you must go over that portion of your available balance, try contacting your credit card company before maxing out your limits and getting a limit increase. If you have been a good customer, this should not be hard to attain. A quick phone call asking to raise your limit for holiday shopping can literally save your credit score from getting dinged unnecessarily.