How to Use Your Credit Card For Christmas Shopping This Year
As I was doing research for yesterday’s blog entry of Top 10 Ways to Save Money on Christmas Shopping, I found that most people were saying to use cash for Christmas Shopping. I beg to differ! If you’ve been reading regularly at Mo2 Thinks, you know that I preach Credit card usage, if you can control your spending!
Be sure to read these other articles so that you know why:
Becoming a Smarter Credit Card User
Make Credit Cards Work For You!
Make Use of Your Credit Line and Payoff Your Credit Card
Now before I go any further, I should say that those that preach no credit card use have a valid point. People tend to spend more when they use credit cards because they don’t see actual physical cash leaving their hands. Not having to worry about the payments immediately is the beauty of Credit Cards and exactly what credit card companies want.
I love credit cards. Don’t get me wrong, I’m not a credit card collector. I actually only have one credit card. And it’s not because I like spending a ton of money or buying a 70-inch flat screen Sony TV without having to worry about the payments, at least until my next credit card statement. It’s because I think they’re a great way to build financial responsibility. If you read my Top 10 list yesterday, the first thing I said is, “plan and budget your Christmas shopping.”
If you know how much you’re spending on each gift and can honor the maximum for each gift, then you shouldn’t spend more. Don’t blame credit cards for spending more, it’s because you aren’t being financially responsible.
Here are some benefits for using a credit card:
1) You won’t have to pay until the next credit card statement.
So you’ll have anywhere from a week to a month depending on when your credit card statement is issued. If you’re planning on using a portion of your next paycheque for Christmas shopping, this is a great way to take advantage of a deal that you find today and pay for it next month. And if you didn’t know, you can change when your credit card payment deadline is by phoning your credit card company. At the beginning of the month, you have to pay for rent, hydro, phone bills, etc. so why not pay your credit card after you get your second paycheque everything?
2) You can Rack Up Points for Your Purchases
Points are what make credit cards so nice. You can get points for everyday purchases that will accumulate over time. Depending on the card you have, you could be getting points toward vacations, merchandise, and even cash to add to your investments or pay down your line of credit. Don’t expect to get rich through points, but much better than using cash that gets you nothing. You should do the math, as all rewards aren’t made equal. One reward could actually be worth a lot more than another with the same points. Anything that is close to cash equivalent is usually the most expensive.
3) Insurance is included
Depending on your credit card you might get insurance on your purchases. This means you could be saving money on the insurance that Best Buy is trying to sell you, which you shouldn’t be buying anyway, and have less to worry about just because you bought something with your credit card. Be sure to check what your credit card comes with, it’s surprising how many people don’t know the benefits that credit cards have.
I’m going off on a tangent here but I recently found out that my credit card had free travel insurance included for the first 15 days of every trip I go on. That saves even more money and while it might link directly to this year’s Christmas shopping it’s a great thing to know.
Those are just some of the benefits of using a credit card. My other articles have looked into some of these ideas and more and I don’t want to repeat myself too much.
Having said all that credit cards can be scary. I recently wrote that the average US household has $15,000 in credit card debt. That is a frightening number. If you can’t control your credit card spending and pay off your balance in full every month, then you shouldn’t be using a credit card. In this case, use cash at all times.
If you can’t stop yourself on going shopping sprees with credit cards, try lowering your credit card limit to say $500 or $1,000. Mastering the use of credit cards has a whole array of benefits and I don’t want you to miss out on any of them.
If you have any other ideas please share by posting a comment. Thanks!
Forum Shops at Caesar’s Palace photo by Cayusa on Flickr.
