Empower Blog

November 09, 2021

What to Consider Before Using the Credit Card This Holiday Season

Credit, Money-Saving Tips
We are closing in on the holiday season! With the holidays comes tons of travel, shopping, and unexpected outings with old friends. During this season of spending, it seems inevitable to use your credit card. Here are some ideas about deciding when and how to use credit, so you do not kick off the new year with extra financial stress once it is all over.

Consider using your credit card this holiday season when…

…you have a payment plan in mind.

Let’s say you know you want to spend $500 this month on gifts, but do not have that in cash at the moment. If you know that in the term of your billing cycle, you will be able to save that and make a full payment on your card — since you are not spending $500 on gifts next month — that would be an appropriate time to consider charging your purchases!

…you have a good rewards program.

When you are able to pay in full right away, the benefit of choosing your credit card over your debit card can come down to the extras. Unless you have a checking account that pays you back, you are likely to get more travel points, cash back, or perks from using your credit card. Plus, check with your card provider to see if there is a holiday deal on earning even more.

…you are traveling.

You may not know it, but oftentimes there are better security and insurance policies attached to your credit card than your checking account. Check with your card provider for the exact parameters of your card’s insurance. Most credit cards come equipped with some form or insurance or security — enough to give you peace of mind making transactions in unfamiliar places.

Avoid using your card when…

…you don’t have any foreseeable plan to pay it back.

Credit cards are not free money, but sometimes they feel that way. If you do not have the money now and have no idea how you may get it in the immediate future, it is not wise to put it on credit. Between late fees and interest charges, you will end up owing even more in the long run, and there is no reason to go into debt because of the holiday season.

…you’ve used 30% of your credit limit.

One good rule of thumb to stay in the grace of good credit – you should not have more than 30 percent of your limit borrowed at one time. It is not an exact number, because your credit score is based on much more than just balances but assigning a number to stay within that 30 percent limit can be just the motivation spenders need to stick to their budget.

When it comes to the holidays, it is easy to fall into the trap of comparing your plans with how your colleagues and neighbors celebrate and overspending to try and compete with them. Do not focus on what others are doing and instead focus on the things that make your holidays, your holidays! Spending aside, there are plenty of ways to enjoy the holiday season with your family without breaking the bank. Remember to savor the memories more than the physical gifts and embrace the traditions that make your holiday season perfect every year.
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About the Author
Professional Picture of Kat Hnatyshyn
Kat Hnatyshyn

Indirect Lending Program Director

Kat Hnatyshyn currently serves as the Indirect Lending Program Director at CommunityAmerica Credit Union, overseeing the program and our partnership with approximately 160 auto and Harley Davidson dealerships throughout the Kansas City metro. This partnership gives CommunityAmerica members a smooth auto buying experience by allowing them to finance their vehicle through us, directly from the dealership.