Don't Max Out this Holiday Season

posted 12/23/2014 in General

“I’ll just put it on my card.”

If you’ve ever uttered these words, you know how great it feels to simply swipe your credit card. The power this piece of plastic has is actually quite astounding considering the amount of credit card debt United States consumers have racked up (about $962 BILLION).

But we don’t have to let the holidays ruin our commitment to living with little to no credit card debt. Try these tips from Lincoln Savings Bank to make it through the holidays without credit card regret.

1.Use only one credit card- owing money to one company for one card is not ideal, but manageable. Having multiple cards with different balances makes it harder to track spending and it’s more difficult to manage your balances and payments. Try to only use one card if possible to limit the different companies you owe money to and simplify account management. Of course, if you do use multiple cards…

2.Try to keep your use to 30 percent of your credit limit- the 30 percent limit is the standard the three major credit reporting agencies factor into your credit score. Staying away from your max limit can give you peace-of-mind as well.

3.Plan your credit card use- it’s better to have a plan for your credit card use. That way you can know ahead of time what expense you’ll be using it for so you know how much you’ll need to pay once the holiday season is over.

4.Don’t fall for the credit card deals- retailers love pushing their rewards or loyalty cards during the holidays. Credit card companies do the same with their cards by giving you the “benefit” of skipping the first couple of months’ payments. Unfortunately, this will catch-up to you after the grace period is over, so just say no.

5.Use cash for everyday purchases- things like gas, groceries and odds and ends add up over time. These things should also already be built into your budget, so you shouldn’t need to use your credit card on them.

6.Pay the balance in full once the shopping is done- it may be a stretch right after the holidays, but try not to carry a balance. If you do, you’re paying more in interest every month thereafter.

Like we said, credit cards can be very flexible financial tools when used correctly. When used poorly, they result in mountains more debt you that can take a long time to recover from. If you would like to add the flexibility of a VISA credit card to your wallet, visit Lincoln Savings Bank today to get started.

Lincoln Savings Bank, member FDIC

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