Using your credit cards wisely over the holidays

If you don't want to be stuck paying off your holiday credit card debt well into next year, you might want to keep the credit cards at home (and away from the computer) when you shop. Paying by cash or debit card requires more discipline, but it will be worth it when you're not facing hefty credit card bills next month.

If you want to use your credit cards for your holiday expenses because you get membership rewards, cash back and other perks, following are a few important tips to help you avoid spending more than you intend or racking up unnecessary fees and interest.

-- Track your spending. Set a limit for how much you're going to spend on gifts, entertaining, decorations and other holiday expenses. Then write down every purchase, no matter what payment method you used. This can help make it harder to "ignore" your credit card purchases.

-- Avoid deferred interest or deferred payment deals. They're just a way to postpone the inevitable. You may think that you'll be able to afford that new flat screen TV when the payment comes due, but you have no way of knowing.

-- Avoid store credit cards. Many retailers offer a tempting discount on your first purchase with one of their cards. However, some of those cards can have hefty interest rates. Therefore, if you don't pay off the full balance, you can end up paying a lot more than you saved on that one purchase. Some store cards offer good rewards and other deals to cardholders, so if it's a store you shop at frequently, it might be worthwhile. However, do a little homework before signing up for yet another credit card.

If you're already mired in credit card debt to the point where it's becoming hard to pay your other bills or if you find yourself in that position after the holidays, it's a good idea what your options are for getting that debt down to a level where you can work towards paying it off.

Source: U.S. News and World Report, "6 Credit Card Blunders to Avoid This Holiday Season," Geoff Williams, accessed Dec. 16, 2016

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