Is There a Grinch in Your Budget?

Your brain is full of spiders, you’ve got garlic in your soul, Mr. Grinch!
I wouldn’t touch you with a 39-and-a-half-foot pole!

If only that 39-and-a-half-foot-pole attitude applied to holiday debt!

The holidays are usually a happy time with festive gatherings and joyful giving, but there lurks just under all that holiday cheer a Grinchy beginning to the new year…holiday debt. Many times credit cards are involved; we use them for all those gift purchases, which can cause us to stretch our budgets to dangerous levels. Money is spent that we don’t really have all in the name of an intoxicating spirit of holiday giving.

Now don’t get us wrong, there is absolutely nothing wrong with using credit cards for holiday purchases. There are advantages to using plastic. The problem comes when we use funds we don’t have and spend too much of the following year paying off all our holiday generosity. Not good. Like many things in life, using credit cards presents both advantages and disadvantages.

Advantages of using credit cards for purchases …

• You don’t have to carry large amounts of cash while shopping
• Some places (airlines, vehicle rentals, hotels) accept ONLY credit card payments
• Many cards offer additional consumer protection (proof of purchase, insurance) for purchases
• Using a credit card wisely (making payments on time) will help build good credit
• Many cards now offer rewards programs

Disadvantages of using credit cards for holiday buying …

• If you don’t pay off your entire balance at the end of the month, you’ll be charged interest
• Temptation can be great to overextend your budget with the convenience of credit at your disposal
• Cards can be stolen and used to make large purchases in your name (of which the credit card companies will often relieve you of responsibility when reported immediately)

As a responsible consumer, your job when using a credit card is to balance the euphoric high of giving with the harsh reality of spending. With that in mind, here are some tips for using credit cards for all that holiday buying:

• Keep your card balances below 30% of your credit limits (to help keep your credit score healthy)
• To avoid card theft, only take one or two cards with you
• Set a predetermined spending limit and STICK TO IT

If you’re ready for a credit card that offers competitive rates (as low as 8.9% APR), no annual fees and more, we offer our Vantage Visa Platinum cards with a rewards program option. Our credit card program made the Dean's List of credit card programs that have earned 5 stars and the Credit Card Connection Seal of Approval for our fair and ethical practices. Click here for more information, or to apply today.   

If you fall victim to all the holiday generosity, remember that Vantage also offers free financial education and counseling for members through Accel. They can help you with budgeting, money management, debt repayment and more. Click here for more information.