With festivities, decorations and gifts top of mind during the holidays, credit cards can be a useful asset to help you spread the joy—as long as you use them responsibly. Here are four tips every savvy credit card user should follow when holiday shopping.
1. We don't want to leave anyone disappointed with our holiday shopping. But when spending gets out of hand, it’s easy to get into trouble. In 2017, the average shopper who accrued debt during the holidays racked up a balance of $1,054, according to MagnifyMoney. It’s OK to use a credit card when you can pay off the balance right away. But if you can’t, the interest quickly adds up, leaving you paying the bill long after your kids tire of playing with their new toys.
To avoid a balance, plan ahead for holiday shopping and budget for everyone on your list—then stick to it. Most friends and family would rather get a homemade gift from the heart than see you go into debt on their behalf.
2. Be smart and safe online
Shoppers spend billions online during the holiday shopping season, allowing many people to work through their shopping lists without ever having to get out of bed. And although online security is better than ever, there’s always a risk of your credit card information being stolen.
Avoid unsecure website connections when you're sharing sensitive information like your credit card number. And make sure the site you’re shopping on is secure—with a URL that starts with https, not just http.
3. Make sure you’re the first to know
It’s important to closely monitor your credit card. You may not be able to completely prevent issues with identity theft, but there are ways to catch problems before they get out of hand.
Most credit card companies offer credit activity alerts that inform you of unusual or suspicious activity. It’s also a good idea to regularly check your credit report for any activity you don’t recognize.
4. Get something back from your credit card
If you’re responsibly using a credit card, then you should be getting something back from it. Using your card and paying off the balance fully can help improve your credit score. (Carrying a hefty balance can have the opposite effect.) And as you shop, many cards offer rewards so you can give yourself a little something extra under the tree. For example, with the AAA Dollars Plus Mastercard, you can earn up to 3 percent back on qualifying net purchases*—in AAA Dollars that can be redeemed for cash back**, discounts and more.
But be sure that you don’t overspend on holiday shopping just to earn rewards. The cost of interest from carrying a balance quickly outweighs the rewards you earn.