Now would be a very good time to start planning for your holiday shopping. If you can work it into your budget for the next two and a half months, you may be able to avoid the dreaded after-holiday-credit-card-debt issue that the majority of Americans experience at the start of every new year.
If youve looked over your cash flow and bills however, only to find the disappointment of knowing you arent going to have a lot of additional cash to make your purchases with, at the very least- spend some time finding credit cards that are going to benefit you the most during your holiday shopping- and hurt you the least over the long term.
Here is what to look for in a credit card you get or use for holiday shopping:
Introductory/Promotional Rate of 0% on all new purchases for 6 months Since holiday shopping is typically done within a one or two month period, you would benefit the most over the long term by using a credit card that doesnt charge interest on those purchases for at least six months. That means youll have six months to repay your holiday expenses before you have to pay interest- and basically just gives you a six-months-same-as-cash option. Since there is no interest. This is a wallet friendly way to get all of your holiday gifts even if you dont have a ton of extra money in October and November to run out and get all your shopping done. Just think how good youll feel making reasonable payments over 6 months, without paying interest?
High Percentages of Cash back: If you already have a credit card with a high percentage of cash back reward program, you should look at it to see if your purchases will result in a sizeable cash back reward. For example, if your card gives you 2% cash back on all purchases, and you typically spend $1,000 during the holiday gift buying season, thats only about $20 cash back and hardly makes a dent! If you have a credit card that gives you 5% cash back on purchases made from specific retailers and you plan to spend $1,000 at a specific retailer, thats $50 cash back and depending on how much the interest rate is or how long it takes you to repay the balance on the card; $50 back might be considered a decent reward. Particularly if you plan to pay off your balance within the grace period of the card to avoid all interest and finance fees. Hey, $50 is another gift- or perhaps a special treat for yourself!
Cards with 0% Balance transfer options - If you know that you tend to shop at a few different retailers over the holiday season, and you just happen to have retailer-specific credit cards in your wallet, you might decide to get a new credit card with a 0% interest balance transfer option. Once youve finished your holiday shopping you can transfer each of your balances to the new card and pay 0% interest for six months to a year (whatever the promotion is).
If all else fails, you can always charge up the cards like you did last year and make a new years resolution that you actually keep- and look into better methods of purchasing your holiday gifts for NEXT year!