Getting Credit Ready for the Holidays

Holiday shopping season is here. If you are like most people that means you will be using your credit cards more than usual. Here are some tips on how to get your credit ready for the holiday season.

Check your credit report.

Before you start spending, get your credit report. Is everything on it accurate? Do you see any unusual purchases? While you may not have time to repair errors on your credit report before you do your holiday shopping, it will be easier to spot errors now before all of your holiday spending. If you notice any errors, go ahead and report them. While they may not be resolved in time to help you get a better credit score for the holidays, it will be a great way to start out the New Year.

Pay off existing credit card debt.

Before you can set your holiday budget, you need a good idea of the money that you have. That means paying off your existing credit card debt. However, you may not need to wipe the slate completely clean before you shop. Many of us use credit cards to make purchases at zero interest and pay for them over a period of time. If you have budgeted for those expenses, then carrying those balances is not a bad idea. However, if you are paying interest on credit card debt, your first goal should be reducing or eliminating that debt.

Make a budget.

Ideally, you are going to pay off any credit card debt before you budget your Christmas purchases. Realistically, we know many people use credit to make their holiday purchases. How much you spend is not a reflection of how much you love, so we urge you to let your budget determine your shopping list instead of the other way around. What cash do you have available for purchases? If you are using credit, what is your plan to pay them off in a timely manner? Do not forget to include decorations, food, travel, and things like holiday wrapping paper in your budget. Once you know your budget, stick to it. Some estimates suggest that people routinely exceed their holiday budgets by up to 50%.

Check out incentives.

Many credit cards have incentive programs. You may get cash back, travel points, free travel insurance, no interest periods, etc. from them. Before you do your holiday shopping, look at your available incentives so you can choose the best way to make your purchases.