How to Holiday Shop Without Hurting Your Credit

| Tedis Baboumian |

Credit cards make shopping easy and convenient for both online and in-store purchases. It’s a busy time for most people, and it’s not uncommon for people to think more about buying gifts and travel tickets than they do about how they’re going to pay the bill after the holidays. Before going overboard with holiday spending, give some thought about how to holiday shop without hurting your credit.

Credit Utilization

Your credit utilization is the percent of available credit that you’re using. When shopping with a credit card, you may not pay attention to how much you’re spending, but keep in mind that your credit utilization has a big impact on your credit score. If your credit utilization does spike during the holidays, to protect your credit, plan to pay down your balance to under 30 percent utilization as soon as you can.

Make Payments on Time

There’s a lot to do during the holiday season, and if you’re not careful, you might even forget to make a payment. It’s important to make sure you don’t do that because a single payment that’s at least 30 days late is reported to the credit bureau. This can bring down your credit score, and it remains on your credit report for seven years. To ensure you don’t forget to make a payment, consider setting up automatic payments through your bank or putting a reminder on your phone.

Borrowing Responsibly

Credit cards may offer rewards or other incentives that make it enticing to use them. Retail stores may try to get you to open a new credit card with their store. Keep in mind that when you apply for a new credit card, another hard inquiry is listed on your credit report, which is factored into your credit score.

When used responsibly, credit cards can help you track exactly what you’re spending. The key is to set a spending limit and make a plan on how you’ll pay back what you borrow. If you’re able to pay it back right away, that’s the best approach. If not, work on paying more than the minimum payment each month. Making several payments a month can help gradually lower your credit utilization rate.

Protect Your Privacy

Identity theft and cybercrime are both growing problems. Don’t use public Wi-Fi to make purchases and avoid inputting any personal information into websites that aren’t secure. A secure website should have “https” in the URL. If the S is missing, the site isn’t secure. Keep software in your personal computer up to date.

Watch Your Accounts

Monitor both debit and credit card accounts to make sure there are no suspicious items. Also, make sure that the information on your credit report is accurate. If you find errors on your credit report, it’s important to dispute them as soon as possible. Misinformation can hurt your credit score.

Dovly is an AI credit engine that works to empower consumers to have the best credit score they can. We can help you dispute misinformation with the credit bureau, giving you one less thing to think about during the holidays. Try it risk free with our free membership tier. Get in touch with Dovly today.

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