November 27, 2012

November 27, 2012
10 Holiday Shopping Credit Card Mistakes

Welcome to another day in my life. Today is Tuesday and I hope you are having a beary safe and great week so far. It is another busy week for Dab the AIDS Bear and me as we get ready for the upcoming World AIDS Day.

This is also the time of year when most people shop for gifts for the holidays. Today, I would like to blog about how to avoid making mistakes when shopping with your credit cards during the holidays.

Shop Online at Unsecured Websites
1. Whenever you're shopping online, it's best to stick to big-name retailers or companies and stores you know and trust. Even with nationally known retailers, anytime you use your credit card for a holiday purchase, double-check that the URL (address) of the website starts with "https" and not just "http." The letter "s" lets you know it's a secure site. Also check for a lock symbol next to the URL, which also lets you know your transaction is secure.

Open Department Store Credit Cards
2. If you're in the mall and a nice lady behind the counter asks, "Would you like to save 20 percent off your purchase?" it may seem like a good idea to say yes. In reality, she's trying to get you to open a department store credit card for that discount. This is a bad move especially if you do it frequently during the holidays. Each time you open a new store card, a "hard inquiry" is generated on your credit report, knocking down your credit score. Besides, department store credit cards usually have higher interest rates than national cards such as Visa, MasterCard, American Express or Discover.

Buy Extended Warranties
3. If you're buying an electronics or tech item, you may be asked whether you want an extended warranty. It's usually wise to decline retailers' insurance: It's often too costly and provides only limited coverage.

Be a Super Santa
4. When you've got a long gift list, it's tempting to turn into some kind of Super Santa. But buying a boatload of presents by maxing out your credit cards isn't the way to create holiday magic. Tapping the limits on your cards is detrimental to your credit and your overall financial health. Plus, if you max out your credit cards, you could wind up getting declined and embarrassed while you're out holiday shopping.

Purchase Expensive Gifts for Reward Points
5. Credit card companies and retailers have figured out that consumers love to get freebies or bonuses to "reward" them for their spending. When you receive reward points, miles for travel or other discounts based on spending you were going to do anyway, that's one thing. But going out of your way to buy pricey gifts just to rack up reward points is foolish because the perks you'll get rarely justify the cost of such expensive goods.

Tomorrow I will blog about another five ways to help protect yourself while shopping during the holidays!

Hope you have a beary safe and great Tuesday!

Until we meet again; here's wishing you health, hope, happiness and just enough.

big bear hug,

Daddy Dab