A Guide To Maintaining Good Credit During the Holidays
The holiday season offers seemingly endless opportunities to relax with family and friends while sharing the simpler things in life. It also offers quite a few opportunities to indulge in bad habits such as overeating and overspending! No one wants to start the new year with a financial hangover from the holiday celebrations, which is why it’s important to plan ahead. This does not, by any means, preclude any opportunities to have fun and be generous–it just means laying down some boundaries and making some strategic decisions. Here are a few tips that you should keep in mind.
Set a budget. First and foremost, plan your expenses, think about how much you can afford to spend, and then set a strict budget. Take into account gifts, meals, travel, and any other expenses that may come up. The more thorough you are in your budget planning, the more efficiently you will be able to spend the available funds that you do have. Of course, if you’re savvy when it comes to gift shopping deals, you will have the opportunity to come in under budget, letting you save for the new year–or at least for the new year’s party!
Ask for a limit increase. Increasing your credit card limits before the holiday season rolls around is a good idea for two reasons. First of all, you obviously want to do everything you can to avoid maxing out. Secondly, most financial experts also recommend trying to stay under 30% of your total capacity for credit. A simple example of this: let’s say your credit card maxes out at $1000–it would be in your best interest to keep your expenses on that card under $300 if at all possible. The reason for this? Using too much of your available credit can adversely impact your credit score.
Be prepared to pay bills on time. This will depend in large part on the budget setting that you worked on earlier. It is also a good idea to be extra diligent about making the payment. Last but not least, be sure to check your monthly report for any suspicious activity–December is a prime month for credit card fraud.
Pay down balances quickly. If you do happen to go over the 30% threshold discussed earlier, it’s not the end of the world–the much more important element of financial responsibility is paying this balance down as quickly as possible. Under no circumstances should you let debt sit on your card for an extended period of time, as credit cards tend to have very high interest rates, which can add up very quickly!
Keep an eye on the big picture, as well! Last but not least, don’t let all the hustle and bustle and holiday cheer that comes with these winter months distract you too much from your broader outlook: financial responsibilities such as loans, car payments, and homeownership tend to present duties that must be attended to year round.
For more valuable information regarding debt, credit, finances, and homeownership, visit Blue Marble Properties online today!