We get it: Black Friday deals always sound too tempting to ignore. Stocking up on holiday gifts can come at the price of running up your credit card balance, risking your credit health along the way. So, before you hit the mall or press “add to cart,” take a look at our tips for maintaining your credit standing this holiday shopping season.
-
Pay bills on time
The holidays are all fun and games until your credit card bill from Black Friday arrives. On-time payments are important for maintaining a good credit score. Ensure that you never miss a payment due date by using online bill pay to designate specific dates or sending in your payment as early as possible. -
Pay more than the minimum
If you can pay off your entire holiday shopping credit card balance, do so. If not, pay as much as you are comfortable with until you pay the balance down. Our Credit Score Quiz can show you how different financial actions may affect your score. You should always pay at least the minimum amount on time every month to maintain a better credit history. Keep in mind, by paying more than the minimum, you’ll cut down on the interest that will compound each month. -
Budget based on net income
Head into the holiday season with a sound budget that will serve as the foundation of your financial health. Create a budget based on needs versus wants and try to work in a line item for saving as well. When setting a budget, make sure to base it on net income (what you bring home after taxes) rather than your gross income (what you earn before taxes), to get a realistic idea of what you can afford. -
Check your credit score for free
Your credit score is a good indicator of your financial health, helping to inform lenders of your creditworthiness for things like car and home loans. Knowing your credit score is a good start to managing it well and taking steps to improve it. You can find resources for monitoring your free credit score here. -
Focus on free fun
While holiday shopping can be expensive, that doesn’t mean that high spending must follow you into the new year. There are many activities in your area that are free if you explore community offerings. Consider opting for a free museum rather than paying for a movie, or a hike in the park rather than an expensive day on the ski hill. Then, take the money you save and add it to a savings account. You’ll be surprised how fast these savings can add up!
