Christ­mas on credit

The Weekly Advertiser Horsham - - News -

Christ­mas is a time of giv­ing and re­ceiv­ing, but as we ap­proach this most dan­ger­ous time of the year for credit cards, it might be time for a quick re­fresher on the best ways to use your ‘plas­tic’ so you don’t end up with a Christ­mas hang­over of the fi­nan­cial kind.

Time doesn’t cost money

Christ­mas is usu­ally a time for fam­ily and friends, so in­stead of buy­ing lav­ish gifts for each other what about ev­ery­one in your fam­ily or group agree­ing not to buy gifts this year and spend time to­gether hav­ing fun?

Or if that isn’t a pop­u­lar idea, maybe each per­son buys just one gift for one other per­son. Sug­gest a limit is placed on how much each per­son spends to keep it man­age­able and fair.

Cash ad­vances cost more

Us­ing your credit card to with­draw cash will in­cur an in­ter­est charge im­me­di­ately and at a higher rate than on pur­chases.

There is no in­ter­est-free pe­riod on cash ad­vances.

If you must take cash off your card for an emer­gency, re­pay it as quickly as pos­si­ble. Don’t wait for your state­ment.

Re­wards pro­grams are not free

Credit cards with a ‘re­wards pro­gram’ come with an an­nual fee.

This charge can be $100 or more a year, plus ex­tra for any ad­di­tional cards on your ac­count.

If you have a ‘re­wards’ card but haven’t been re­warded for your use in the past year, it might be a bet­ter idea to ex­change your card for one with­out all the bells and whis­tles and no an­nual fee.

Read the fine print

Credit providers are re­quired to state their terms and con­di­tions in sim­ple English, so it is a worth­while ex­er­cise to read through these doc­u­ments when you are shop­ping around for a new card or when you are ad­vised of a change to your cur­rent ser­vice.

A slight mis­un­der­stand­ing can cost you money or re­duce the ben­e­fits your card was sup­posed to de­liver.

Credit cards are an ex­cel­lent way to man­age your Christ­mas buy­ing.

The se­cret is to keep a record of your spend­ing so the state­ment isn’t a com­plete sur­prise and then pay off the full bal­ance ev­ery month; oth­er­wise you could still be pay­ing off this year’s gifts a year from now.

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