Man Christmas shopping with his credit cardIt may be the most wonderful time of the year, but gift-giving, hosting and traveling can make the holidays one of the most expensive. As much as we love the holidays, there’s nothing worse than facing inflated credit card bills once January rolls around. It’s easy to get swept up in the joy of the season, but if you don’t have a handle on your finances, things can get messy when bills start arriving. Many of us rely on credit cards to make things easier, so in order to avoid any undue stress at the start of your new year, check out these top mistakes to avoid making with your credit cards this holiday season.

Not Having a Budget

It’s the oldest trick in the book for a reason – it works. Determine how much money you’re able to spend by taking time now, before the holidays kick off, to see what your current credit card balances are. Even if you pay your credit cards off each month, creating a budget will help you charge within your means and keep you from paying interest on items. Make a list of everyone you need to buy for and set price limits for gifts. This will help you avoid excessive purchases in the moment. Factor in any travel and hosting expenses you expect and work from there.

Not Tracking Your Balances

The only way to stay on budget is to track your credit card balances. Whether you keep a running tally on paper, or set your credit card apps to send you push notifications for every swipe, you need to know how much you’re spending. It’s easy to concede a few extra dollars here and there, and at least one or two relatives always get forgotten, but those things add up quickly. Checking your balances after each outing will help keep your expenses in sync with your budget.

Maxing Out Your Credit Cards

Even if you have the cash to cover your balances, it’s best to spread your expenses out among a few cards, rather than piling all of your charges on one. The amount varies, but using more than 10–30% of your card’s credit limit can negatively impact your credit score. Some cards charge fees when you exceed your limit, which is another reason to keep track of your balances as you shop.

Opening Store Credit Cards for One-Time Discounts

It’s tempting to take advantage of additional discounts when expenses are higher than usual, but avoid opening a new store credit card every time the salesperson offers you 15% off your purchase. The big drawback to this is the impact is could have on your credit score. It’s fast and easy to get approved for credit at the cash register, so it’s easy to forget that the bank holding the store’s card is still performing a credit inquiry to get you approved. Your credit score can take a hit with each of those inquiries, especially if you apply for multiple cards in a short span of time. You’ll also have to deal with keeping track of paying off all of those new cards after the first of the year.

Avoiding Post-Holiday Billing Statement

Yes, it can be unpleasant, but ignoring it won’t make it go away. Even if putting it off gives you some temporary relief, not looking at your credit card statements soon after your closing date can make things more complicated for a number of reasons. First, you’ll need some extra time to go over all of your charges. You’ll have more than usual, which means catching any inaccurate or fraudulent charges might be more difficult. Procrastination can also lead to forgetfulness. It can be hard to get back into your normal routine after the first of the year, and it’s easier than you think to miss your due date for a credit card payment. This translates to fees and possibly a hike in your interest rate. If you stick to your holiday budget, you’ll know what to expect, so check your statements as soon as you get them to avoid any surprises.

Credit cards can make things easier during a hectic time of year. Just avoid these pitfalls to escape any issues once the holidays are over.

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