credit card advice
Families are stringing up their Christmas lights, Charlie Brown is back on TV and stores are replacing pumpkin-flavored everything with peppermint-flavored everything — we’re in the thick of the holiday season.
If you’re like millions of other Americans, you’ll be doing some hardcore holiday shopping this time of year. Practically every retail store will offer you their best deals of the year, hoping to draw you in as their latest customer.
And, like millions of other Americans, you’ll probably do a bit of decorating as well. Maybe throw a dinner party or two.
With so many purchases, it may be tempting to whip out the credit card to spend a little bit beyond your means.
Here to help us keep our credit cards in check is Terry Savage, nationally-syndicated financial columnist and author of “The Savage Truth on Money,” with some excellent tips and insight.
Before people leave their homes, how should they plan their gift shopping?
“Be like Santa — make a list and check it twice! Does everyone on your list really need a gift from you? Would a card do as well? Would homemade cookies or a cake be a less expensive — and more appreciated — substitute for guessing at what they would like from a store?
“You can easily get carried away in the holiday atmosphere of shopping, so do your homework online. And consider ‘going in together’ on a gift. Or telling the whole family that this year there will be a grab-bag — and to bring only one gift that would be appropriate for anyone who picks it!
“And then do your research online to find the best prices or just ideas for gift-giving. It’s far less tempting than wandering through a department or electronics store. And you might even save in sales taxes and mailing costs!”
What’s better to use: cash or plastic?
“I worry about carrying a lot of cash when doing my holiday shopping. Your wallet is a tempting target, and when someone sees a wad of cash as you pay for an item, you paint a bulls-eye on yourself.
“But your debit card is the same as cash! You can’t spend more than you have in your account, and you are 100 percent protected against fraud. Just be very careful to guard your PIN when using your debit card,” Savage said.
What are some ways retailers entice customers to spend more than they planned?
“You won’t find too many offers of discounts for opening a new credit card in the store this holiday season. There’s too much concern about fraud, but many stores will give you a certain percent off the total IF you spend above a certain amount. So you buy more just to get that discount! Forget it, you don’t save money by spending more!” she said.
Thinking about opening a new credit card? Check out our hand-picked list of 2014’s best credit cards.
How can people cut down on home expenses like cooking for a family get-together or decorating for the holiday season?
“Families should rotate entertaining each year. But if one family member has the ‘perfect house’ for a party, then the others should be gracious about bringing the wine, or the dessert, or making some of the main course at home and bringing it to the event. Remember, the host gets to keep the leftovers and enjoy them the next day, so it all works out in the end!”
How should we prioritize who we buy gifts for, especially if we work with many people?
“A good office manager will establish the holiday giving rules long in advance. Perhaps you could all give contributions to a local children’s charity,” she said. “There is no reason to buy personal gifts for any business associate or even your boss. Instead, make a charitable contribution and send a card noting that a gift has been made in their name.”
Is there a way people can use credit cards to actually make money while shopping?
“The whole idea of shopping in the holiday season is to make someone else happier by choosing an appropriate gift that expresses your personal relationship. If you happen to get airline miles or cash back on your purchases, that is a side benefit,” she said. “But the greatest gift you can give yourself is not to face a mountain of credit card bills in January!”
Check out these credit cards with excellent points and gifts systems if you want to get the most bang for your buck this holiday season.
For more tips from Terry Savage, check out her books.