The Dos & Don’ts of Holiday Shopping with Your Credit Card

Using your credit card for holiday shopping can provide you with some serious perks. However, without a solid plan in place, shopping can quickly become a financial headache. It’s important to use your credit card wisely to avoid overspending, accumulating debt, or falling victim to scams. To help you stay on track, we’ve put together a few best practices for using your credit card while shopping this season. 

Do: 

• Set a budget. Don’t rely on your credit card limit to set your holiday budget. Have a good understanding of your current financial situation to help determine how much you’re able to spend this season. Your budget may vary from person to person. Keep yourself organized by writing down your spending plan before you begin shopping - and stick to it!

• Monitor your charges. Scammers don’t stop during the holiday season. Keep an eye on your transaction history in digital banking and use account alerts to check purchases against your receipts. While this will help you spot potential fraudulent charges, you’ll also be able to identify any errors. Because transactions are conducted quickly in fast-paced holiday checkout lines, you may notice an instance where you’ve been double-charged or accidentally charged an incorrect amount. Being diligent about monitoring your transactions will help reduce any negative impact on your finances.

• Know how to access any card security features. For example, PSECU has a card lock/unlock feature. accessible under Manage Cards in digital banking, can be used if your card is misplaced or if you suspect fraud. Other card issuers and financial institutions may offer different features, so know where to find them and how to use them.
• Maximize your cash rewards. Many credit cards come with a rewards program; you should take full advantage of this benefit when shopping this season. Store credit cards may be tempting, but they’re often saddled with high interest rates and limited perks that only apply at that store. Instead, use a rewards card that gives you cash back on every purchase, like our Founder’s Rewards Card. This way, you’ll get more value for your spending.

Don’t: 

• Apply for too many credit cards. With numerous retailers offering additional discounts for opening a store card, you’ll want to be mindful of how many cards you apply for, as the number of inquiries will impact your overall credit health. Frequent credit inquiries can reduce your credit score and signal to lenders that you may be unable to afford purchases without using credit. Often, offers from retailers have a limited timeframe for benefits and can have card fees associated with them, potentially negating the rewards they offer.

• Max out your credit cards. When making purchases, keep an eye on your credit limit. If you max out your credit cards, you’ll impact your credit utilization in a negative way, possibly bringing down your credit score. Credit utilization is the percentage of your credit that you’re using at any given time. High credit utilization tells lenders you may not manage your available credit well, making them less likely to lend to you in the future.

• Forget to pay your bill. With the holiday season packed with events and obligations, it can be easy to miss important deadlines. The last thing you want to do is miss your credit card bill payment. Missing payments can impact your credit for up to seven years and may result in hefty fees from your card provider. Utilize your calendar to set reminders for when payments are due, and consider making small payments each week to help bring down your balance.

In addition to following these tips, be sure to use our digital banking tools to make shopping less stressful. Sign up for account alerts to help you keep track of your spending and use our free credit score service² to keep your credit top of mind. For more financial tips and tools, visit our WalletWorks page.

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²PSECU is not a credit reporting agency. Members must have PSECU checking or a PSECU loan to be eligible for this service. Joint owners are not eligible.