Suddenly, the good feelings of the Christmas season are gone, replaced by anxiety as you attempt to find ways to handle your bills.
Buying what you want for Christmas with cash is the best plan for consumers. However, we know that credit is a big temptation, one that if managed properly can be useful for protecting your purchases. You can avoid credit worry this Jan. by keeping in mind the following points this Christmas shopping season.
When Bills Come Due
Shop early enough in the holiday season and you’ll start to receive bills before Christmas. This isn’t hard to do especially if you shop on Black Friday or earlier. Examine your credit card agreements carefully to learn when the billing cycle ends and how long you have to pay (float) before payment is due.
If your billing cycle ends on Nov. 30th and your creditor gives you 25 days grace to pay, then your bill will come due precisely on Christmas Day. You need to make at least a minimum payment before that date to avoid penalties.
Pay Off, if Possible
Using credit responsibly means paying off your credit card statements when they come due. If you make only a portion of a payment, then the remaining balance will carry forward to the next payment period and your interest rate will accumulate accordingly.
Always plan to pay off your bills. Should this not be possible, then resolve to pay down your Christmas bills within two to three months. You can keep the problem from exacerbating by refusing to charge further or at least until after your Christmas debt has been paid. Allow your debt to go on longer and you may find yourself overwhelmed and unable to get back on your feet.
Deals or Not
Many of the deals that you will see over the holiday season are not as good as you may think that they are. The “Black Friday” hype is just that — a way for retailers to extract more cash from you. You may be able to save money by shopping around or by waiting until “Cyber Monday,” the annual online version of Black Friday deals.
Before you begin shopping, make a budget. Then resolve to stick to it. Try to pay cash for everything. Once you use credit, then you may be tempted to spend more than what you can afford. With cash, once your money is gone it is gone.
The New Year
Once the new year arrives, plan to review your credit card statements as well as your current credit card agreements. You should understand what interest rates are charged and how these charges are calculated. Familiarize yourself with due dates and set up reminders to ensure that a payment is never missed. If possible, make payments to your credit card provider directly from your bank account, authorizing withdrawals at least five days before the due date.
If you run into trouble credit card counseling may be available from an organization or a business. Verify the counselor’s reputation through your state Attorney General or through a local consumer protection agency. Understand what services are offered, what fees are charged and if a contract must be signed. Some counselors provide their service on a sliding scale, basing their fees on your ability to pay.
See Also — How to Stretch Your Christmas Budget
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