Christmas on credit Christmas is a time of giving and receiving, but as we approach this most dangerous time of the year for credit cards, we’d like to give you 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 per 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.
Disclaimer
This information is current as at 08/12/17. This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.
