Due to scheduled maintenance, Online Banking, Mobile Banking, and Tellerphone systems will be intermittently unavailable on Sunday, October 24 between 12:00am and 5:00am MDT.

Welcome To The Insighter!

Explore the latest happenings at Kirtland FCU and learn about important topics from around the financial world. Here’s your insight! To learn about retirements, investments and financial planning, check out Invested now.

Holiday Credit Card Dos and Don’ts

By Ashleigh, K-Staff

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Fueled by stimulus dollars and record savings combined with an optimistic outlook by this year’s holiday shoppers, holiday shopping in 2021 is expected to hit record levels, up more than 7% over 2020 spending, according to a Mastercard SpendingPulse survey. Online shopping will lead the way, anticipated to be up a staggering 51% over 2019 numbers.

Are you one of the millions of Americans getting ready to hunt for holiday deals? Here are a few tips for making the most of your holiday shopping—and how to avoid some of the pitfalls.

Tip 1: Set a Budget

Make your list and check it twice! Determine how much each pay period you can safely spend on holiday gifts and start shopping early to spread out the costs. If you’re using a credit card, decide how much you’re comfortable spending and how you can adjust your monthly payments to cover it. Remember, any balance that isn’t paid off at the end of the month will incur interest charges.

Once you have your total budgeted amount, make a list of each recipient (don’t forget to include work and school gifts!) and then assign a budget for each recipient. Save your receipts and track your spending!

Tip 2: Understand Your Rewards Program

Rewards credit cards can offer a big incentive to spend, giving you more bang for your buck. Before you make any purchases, make sure you understand your credit card’s rewards program.

Some important questions to ask yourself might be:

  • What purchases will earn rewards?
  • What type of rewards can I earn?
  • How much do I earn per $1 spent?


Deciding whether you want to use one or multiple cards might depend on what rewards you want to use. Any traveling plans? Use a card that will earn you miles. Online shopping? You might want to use a card that gives you rewards for online shopping.

Learn more about using your Independence Credit Card and earning potential rewards here. 

Tip 3: Lower Your Interest Rate

Before you make any purchases, consider whether you’ll be able to pay off your credit card in full. Carrying a balance month to month will result in interest charges. Interest rates on store credit cards can be substantial, making it more difficult to pay off the balance. A low-rate credit card is your best bet if you don’t plan to pay off your balance right away.

If you do end up charging your purchases to a higher-rate credit card or a card with an introductory great rate, consider a balance transfer to mitigate those high interest charges.

Tip 4: Shop Safely

Credit card fraud can happen at any place, any time, but the holidays offer a prime opportunity for fraudsters to take advantage of record numbers of shoppers.

  • Consider linking your cards to your digital wallet, using Apple Pay or Google Wallet. Learn more about safely paying with your digital wallet here. 
  • Stick to websites with https and not http and always check for an SSL security certificate. Don’t purchase from links on social media!
  • Use caution when you are purchasing from third-party vendors like Amazon or eBay. Always verify the seller’s information before handing over your credit card details.
  • Avoid using public Wi-Fi for making any purchases online. It is not secure.

Tip 5: Retail Credit Cards

Be wary if you’re prompted to sign up for a shiny new credit card while purchasing your holiday gifts. They’ll promise a sweet discount on your first purchase, but there are probably strings attached. A shiny 0% introductory rate on retail credit cards can easily exceed 24% APR (annual percentage rate) after the promotional period ends. If you don’t pay off your balance by then,  you could be in for an expensive bill. Stick with a credit card with a lower interest rate or one that earns cash back or other rewards.

Tip 6: Resist Impulse Buying

Set a plan and stick to it. It might be easier said then done, but impulse buying can quickly drive up your spending total. Use your budget and only allow yourself to buy what you’ve budgeted for.

Did you find the PERFECT gift, but you didn’t budget for it? Use the 24-hour rule: wait 24 hours before deciding whether to make the purchase. Once the excitement passes, you may feel less inclined to break the bank.

Tip 7: Just Because You Have It Doesn't Mean You Should Spend It

Maxing out your credit cards can be harmful in more ways than one. Maxed out cards can damage your credit score, and the balance can take years to pay off. Set up alerts on your credit cards that let you know when you get past a certain spending limit, this way you’ll know when you’re getting close to reaching your limit.

Have a great holiday shopping season, and stay credit-smart! The best gift you can give yourself is a debt-free new year.

can you handle a crisis?

Do you have an emergency fund?