It’s the season for gift giving, and that means extra spending. Credit cards can be a convenient way to purchase gifts for family and friends, but it’s important to stay organized and make sure you have a plan to pay them off. Take these steps before you do your shopping to ensure that you’re prepared.
Check Your Credit Report
Your credit report provides the best summary of your overall financial standing. Your report will list all of your credit accounts, loans, and credit inquiries and will also list any delinquencies. To get a copy of your credit report, write to the credit bureaus – TransUnion, Experian, or Equifax – and include two forms of identification such as a current driver’s license and utility bill. You can get a free copy of your report from each of the bureaus every 12 months.
You may also want to check your credit score. This information will give you an idea of your overall financial standing and will alert you to any areas that could be improved. If your score is lower due to late payments or a lot of spending on credit accounts, you may choose to adjust your spending to fit your budget.
Keep an Eye on Credit Utilization
Now that you know the credit limits on each of your accounts, try to avoid spending more than 30% of your available credit on each of them. For example, if you have a credit card with a limit of $1,000, you should do your best to avoid spending more than $300. Your credit utilization factors into your credit score, so spending more than 30% of your available credit could lower your score.
Set a budget for each of your cards to avoid overspending. This will also make it easier and more manageable when it comes time to pay them off.
Pay Your Balances in Full and On Time
Set reminders to pay off credit accounts in full and on time. Carrying a balance in to the next month will mean paying more in interest fees. Your budgets will help you stay on track and help ensure that you’re always able to make your bill payments.
Taking the time to prepare your credit accounts for holiday spending will allow you to enjoy the season without extra financial stress and will set you up for success in the new year.
Seek the Help from a Consumer Protection Lawyer
Flitter Milz is a nationally recognized consumer protection law firm that represents consumers who have been contacted by debt collectors, or that have issues with listings that appear on credit reports. Contact Us for a free evaluation of whether your consumer rights have been violated.
