What to know if you’re going to open a credit card to do holiday shopping

What to know if you’re going to open a credit card to do holiday shopping

It’s almost Christmas shopping season, and for millions of Americans that means they will take on unneeded debt for months.

Millions of Americans will use the holidays as an excuse to open a new credit card, though that isn’t inherently bad. A credit card can be a good decision, especially when used to gain points and rewards toward other goods. But, it can also be a big problem when you use it to spend money you don’t have, or won’t have in the near future. That’s why you have to know your budget.

“Knowing how much you’re have to spend, or how much you’re going to spend or knowing how quick you can repay it,” said Chris Simchuk, the AVP of retail lending at Numerica Credit Union.

If you make a budget properly, it can yield good rewards. But, one thing you want to avoid is a card with an annual fee.

“You want to look at your annual fees or your expenses of opening on it. It’s probably not recommended to open a credit card and close it cause that would affect your credit,” Simchuk said.

But, not everyone will be as responsible with their credit cards, and keeping Christmas debt in 2019 will be inevitable. To get it paid of quicker, your budget will be more important than ever. Make sure you’re setting aside money each month to get it paid off as quickly as possible.

But debt can be avoided. While it’s too late this year, if you start saving in January of 2019, you can build a great nest egg for next Christmas. That will avoid any need for a credit card.

“Budget ‘hey $50 out of every paycheck will go to a Christmas savings account.’ Then when you come to November or December when you want to go shopping, you have money set aside,” said Simchuk.

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