Using Credit Cards for Holiday Expenses

It’s no secret that the holidays tend to stretch your budget harder than most other parts of the year. Between buying for holiday meals and, of course, all the gift buying, the last couple months of the year can get pricey.

Here are four tips for using your credit card for the rest of the year.

  1. Don’t max out your credit card. Reducing your amount of available credit could cause a downward tick in your credit score. Depending upon your credit card’s interest structure, it could make it far more difficult to get your balance paid down. A short-term spending spree could lead to long-term headaches.

  2. Monitor your credit card transactions closely. While the holidays are a time of generosity and cheer, the fact remains that the risk of identity theft and credit card fraud can’t be completely eliminated. Scammers don’t take holidays off. Log into your accounts often and look through your transactions closely. Report anything that looks suspicious. If you have the ability to get text alerts or push notifications, turn them on. The sooner you catch bogus transactions, the fewer headaches for you AND your bank.

  3. Think carefully about store cards. Many retailers offer their own branded “in-house” credit cards and offer promotional discounts or rewards. But look over any deal carefully. Your credit score is likely to get dinged when you open a new account. The more credit cards you have, the more you have to manage. Juggling multiple balances on multiple accounts makes it easier to drop the ball and miss a payment. Before accepting any store credit card, make sure you know what fees and interest rates it has and whether it really meets your needs.

  4. Make a budget. While it may feel like a relief to avoid spending cash short-term when making a credit card purchase, without a plan to pay down the balance, you might really just be moving the cost down the road. Having a budget is the best way to determine if you can really afford something.

If you need to get started budgeting your finances, or want to try a different tool to do it, BancorpSouth’s Online Banking can help. Log in to your account, and check out the Budget and Savings Goals tools under the Spending tab. Set your goals and manage your money today!