Protect Your Credit Rating This Holiday Season

The holidays can be a crazy time, with mad shopping sprees and credit cards practically heating up from all the use they’re put to. With all the activity and spending, you’ll want to be sure that you’re doing enough to protect yourself from getting into trouble this year.

Credit experts agree that the holiday season is a very dangerous time for your credit rating. With all the gifts to buy, and all the attractive offers for various things, we feel a strong urge to spend. Credit issuers are there to take full advantage of that urge, and have become very sophisticated in the way they structure offers for credit.

Be careful, though, since not all of those offers are in your best interests. Don’t talk yourself into taking on high-interest debt this time of year. In particular:

Protect Your Credit Rating for 2015

Check your financial status before the shopping madness. This means checking your credit rating, doing some financial planning, and setting a budget for holiday spending. Be strict.

Avoid taking on new, high-interest cards. Store credit cards are notorious for their high interest rates, yet stores are notorious for offering them to you at holiday shopping time.

Marketers these days construct attractive offers that often include incentives such as cash cards and gift certificates for opening a new account. They also love the “interest free for ___ months” ploy. Just make sure you read the fine print, since these cards are usually in the top tier in terms of interest rates – even for people with good credit scores.

Don’t take on more debt than you can pay off early in the 1^st quarter of 2015. Yes, that means by March at the latest, (and, better yet, by January 1^st). Also, don’t be optimistic about your ability to pay back that debt.

The holidays are a time of good feelings, and optimism about the New Year ahead. However, don’t let that good feeling play tricks on you, and convince you that you can pay off more debt than you will actually be able to. Once again, marketers are very well tuned into the psychology of the holidays, and are eager to encourage you to splurge. Resist!