Credit often becomes even more important or a bigger hindrance around the holidays. It can either make your holidays better because you can spend more, or it can limit how much you have to spend if you have bad credit or none at all. Here are some ways to make sure your credit is ready for this busy season.
Pay Off Your Balances
If you have a balance on your credit card, pay it off now. Doing this will benefit you in two ways. First, it can help raise your credit rating because you lowered your credit utilization. Second, it gives you money to spend by using credit, and you’ll have 30 days to pay it off before being charged interest in most cases.
Figure Your Budget
If you decide to use credit cards to buy your holiday items, you need to calculate how you’re going to pay them off before interest is charged. Many people use their available credit knowing they will only be able to make the minimum payment when it’s due. This will get you in trouble, and your purchases will cost more money by the time you add in interest charges.
Find Out Your Loan Options
Some lenders and creditors offer a deferral during December as a thank-you to customers for their business. This bonus could give you extra spending money when you need it. Of course, not all lenders will advertise this benefit, so you may have to ask. Find out the requirements such as still paying the interest or being current on all payments due to see if you can take advantage of a deferral.
Set Your Limits Lower
If you know you struggle with staying within budget for the holidays, you need to start out with a lower limit. Even if you know you’ll have $500 to spend on gifts, cut it down to $350. This gives you a little room to work while ensuring you don’t end up with more debt.
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