The holiday shopping season is in full swing and that means more people are charging presents on their credit cards. But if you donât want to be a part of the record high credit card debt people have - which is more than $1 trillion - here are some ways to spend smarter this year.
Beware of store cards - âThe worst retail trap to avoid this holiday season is to sign up for a store credit card,â says Charles Tran, founder of personal finance site CreditDonkey. Thatâs because, store credit cards tend to come with higher interest rates and fewer benefits than other kinds of credit cards, Kimberly Palmer, credit card expert for Nerdwallet.com explains.
Stop falling for âlimited time offersâ - People are around one and a half times more likely to open a store credit card during the holidays and retailers take advantage of that, luring you in with âlimited timeâ offers. But donât sign up for a card just because thereâs a promotion, âitâs not a bargain if you donât need it,â Tran says.
Donât miss out on great card card rewards â if youâre a responsible consumer - If youâre good about paying your balance in full and on time, take advantage of the high sign-up bonuses and cash-back offers credit cards offer during the holidays. But only if you can pay it all off, otherwise the interest you accrue isnât worth it.
Remember these little-known credit card perks - Price protection is a perk you might not realize some cards offer. When you buy something on the Citi Price Rewind card, they do a 60-day search for a lower price and refund you the difference. Discover and some Mastercards have similar offers. Some credit cards also offer chargebacks, which allow customers to refuse payment for goods that were damaged, not delivered, or that didnât match the sellerâs description.
Source: Moneyish