With a little insight, careful planning and an eye on the shopping prize you can make the holiday season one full of joy, without experiencing a credit hangover on your credit report or credit score. Are you up for the challenge? On your mark … get set … relax!
If you’re a procrastinator this is going to be really hard. The thrill (terror) of waiting until the eleventh hour and madly getting the perfect (nearly) gift for everyone can’t be denied. But neither can the reality that you pay a premium for your mad dash, even if you don’t know it. Try a more methodical approach.
Step one, make a plan. Simplify where possible.
Every season there’s the must have toy, for child or adult. There’s not a lot to report here, if you’ve got to get it, you’ve got to get it. In other areas however you’ve got some room for flexibility. Set a budget of what you want to spend, divide it amongst the lucky recipients and get ready to keep score. Want to enforce this hard core? Purchase prepaid credit cards for each individual and once they’re empty, they’re done. For better or worse, this strategy won’t show-up on your credit report or affect your credit score. Of course, this will often mean you can’t take advantage of reward programs, which is another way to secure gifts. Also don’t forget to take advantage of online shopping reward sites like ebates.com or mypoints.com! As an added precaution consider using the paypal option where available – if you choose your funding source carefully you can plan the effect it will have on your credit report.
Online vs. in-store?
There’s no reason they need to compete. Most brick and mortar stores also have online presences. When you’re deciding what to buy become familiar with the products, potential substitutes and then look for better deals and be patient. Surf websites like pricegrabber.com, which allow you to set up price and product alerts to notify you when something you’re looking for is for sale somewhere on the web. When comparing prices, make sure you also take into account shipping, handling and taxes!
On a final note, if keeping the $ value of your gift giving equal is important to you, you may want to keep at least a percentage of your gifts of a flexible nature, so you can shift them from pile to pile when evening up. This could be anything from books to chocolates to one-size-fits-all sweatshirts … they don’t really, but with any gift, it’s the thought that counts.
// Good to know //
Some companies are beginning to charge monthly inactivity fees, while others are closing inactive cards, which can affect credit scores. Ben Woosley, director of market and consumer research at CreditCards.com, recommends that, “It might be worth it to use those cards to keep them active,” and pay off the balance right away.
– Synergistics Research Corporation Study 2010