Credit Traps To Avoid This Holiday Season

The holiday season always seems to take a toll on consumer credit health. We have some tips to help you avoid credit traps and maintain healthy credit so that you can reach your financial goals next year!

Avoid Store Credit Cards

Tis the season for excessive credit inquiries. Unfortunately, applying for store credit cards to save money on your purchase could negatively impact your credit health. According to FICO, new credit and credit inquiries make up 10% of your credit score and can impact your credit health for up to 12 months. In addition, whatever the discount you’re receiving at the register is usually made up in the interest you’ll pay over time on the credit card.

Plan Your Spending

Most credit traps are the result of poor planning. This year, build a plan or budget for your holiday spending, and have a plan for paying off credit card debt quickly. This can help you avoid unnecessary late payments, excessive interest payments, and long term financial distress. Looking for a good way to budget? Check out You Need A Budget for more resources.

Monitor Your Credit

Identity theft always spikes during the holiday shopping season. The best way to avoid identity theft is to monitor your credit on a regular basis. Check for any new inquiries that you didn’t authorize, or any new accounts created without your permission. The faster you catch these issues, the easier it is to get them resolved. Need credit monitoring? We recommend SmartCredit, which even provides identity theft insurance.

As always, we’re here to help however we can. If you’re struggling with credit challenge and are looking to build a healthy credit profile, contact us today for a Free Credit Evaluation.