Financial Tips

Using Credit Wisely for the Holidays

As the holidays approach, tis the season for shopping! Retailers play to our emotions and take advantage of the festive spirit to encourage our spending. The pressure of the holidays has us striving to purchase the perfect gifts, prepping to host holiday guests and dressing the part for parties, but these buying impulses can get the best of us if we don’t plan ahead. To avoid draining your bank account, here are some helpful tips to navigate your finances and wisely use credit this holiday season.   

Make a list and check it twice. To prevent yourself from being overwhelmed, make a list of who you are shopping for and gift ideas. Then determine your overall budget in advance. Consider selecting what you will purchase before you go shopping and try to stick with your list. This can help you from getting caught up in online sales or in-store promotions that tempt you to make additional purchases. While it is nice to give to others, these impulse buys could break your budget! If you have a game plan and stick to it, you can avoid a debt hangover later. Track your spending as you go to ensure you are sticking to your budget.

Identify credit cards that offer 0% APR on purchases. If you decide to open a new credit card for your holiday shopping, get one that offers 0% annual percentage rate on purchases. Typically, this 0% APR will be available for an introductory period. Be sure that you have a plan to pay the balance in full by the time this period ends so you are not paying interest on a leftover balance. Taking advantage of a 0% interest rate can allow you to do a little extra shopping during the holidays and spread out the expense over several months. But don’t let that holiday debt linger once the interest rate increases!

Shop with a cash-back credit card or rewards credit card. Reap the benefits of making purchases with a credit card this holiday season by using a card that provides cash-back or rewards. Get familiar with the perks associated with your credit card so you can maximize them effectively. You could consider using cash-back towards other holiday expenses or maybe you want to save your points and redeem for a trip later in the year. Just be sure you can pay off your balance in a timely manner. The rewards associated with a credit card are usually not worth more than the interest you would pay carrying a balance.  

Use only one card. Using one card makes it easier to track your spending and ensure you are staying within your predetermined budget. Review your current credit sources to determine which one has the appropriate limit you need, a favorable interest rate, advantageous payment terms and provides you the best reward for usage. Stay secure by adding the card to your mobile wallet. Remember, the goal is to enjoy the holidays while not damaging your credit condition, so stay within your budget and look to pay off the balance the following month, if possible.

Complete your shopping early.  Shopping earlier can allow you to put some thought into your holiday purchases, to plan ahead to find the best possible deal and to avoid last-minute impulse purchases. All of these things can help keep your spending under control and give you time to relax and enjoy the holidays with your family.

These helpful hints can set the stage for a wonderful, financially fit holiday season. By making wise choices and budgeting effectively, you can avoid draining your bank account so you can enjoy a debt-free New Year. The team at Univest is here to help with your financial wellbeing. Visit univest.net, stop by your local Univest Financial Center or call 877.723.5571 for more information.

Univest Bank and Trust Co. is Member FDIC and an Equal Opportunity Lender.