Keeping control of your Christmas credit card spending
Posted September 9th, 2009
and last modified December 2nd, 2009There is no doubt in most people’s mind, that Christmas credit card spending is greater than at any other time of the year. Approximately a staggering $15 billion is spent in December most years.
If you are good at budgeting and at making your credit card repayments, Christmas can be a great time to build up those reward points, but if you are not either of these then you are creating a headache paying for Christmas on your credit card.
The change in the financial economy of the world has seen some major changes in the credit card industry. There are all sorts of options for lower interest rates, balance transfers and reward points. If you have had a credit card for several years, now may be the time to make a change.
Before you do go making enquiries about your credit card status and get all caught up in sales hype, have a good look at how you use your credit card.
- Do you use it on a regular basis?
- Do you pay the balance of each month?
- What do you buy on your credit card?
- Do you carry it with you and use it impulsively and regret it?
- Do you do online banking?
- Are reward points important to you?
By answering all these questions you will better understand what short of credit card would best suit you. There are bank credit cards, retailer credit cards, monthly account cards and more.
High Interest and Low Interest cards
If you are a person who does not get the full balance paid off each month then you are known as a ‘revolver’ because you continually have a balance on your card and you pay interest on that balance each month. If this is you, then a low interest rate card would suit you the best as the lower the interest payments you have to make each month the better.
On the other hand if you do manage your credit card well and pay off your balance each and every month, then you are what is known as a ‘transactor’ and therefore the monthly interest rate is not going to be much of a concern to you, but probably the features would be more use to you, like what rewards programs are on offer. You could well benefit from Christmas credit card spending.
Fee Expenses
Nearly all cards come with an annual fee so if you do not use your card very often you would want to make sure your annual fee is as low as possible. Fees vary quite a lot and one of the factors that cause fees to vary so much is the reward programs being offered.
You may find a card that waives its annual fee for the first year, but make sure that you know what it is the following years. Whatever offer you look at make sure that after the initial period of the offer the costs are not prohibitive.
The True Costs Of Your Credit Card
Simply, those who do not pay off the full balance each month are best with a card that has a low interest rate. For people who do pay off their balance each month there are other aspects to look at like rewards points, insurance offers, travel offers, and so on.
Some cards today are charging around the 10% mark for interest and others still go above the 20%. Interest rates change on a regular basis so it does take some research to find out which card is going to suit your purposes the best.
One point to consider, which is often forgotten is to look at the rate for cash advances. Cash advances attract a transaction fee and on top of that you will find that most card providers charge a higher rate of interest than the standard rate, and the interest is charged from day one as the interest-free period does not apply to cash advances.
Reward programs may be of interest but it is important to understand the concept. Reward programs are designed to reward you for spending so if you go spending up on your card and then find that you cannot pay off the monthly balance, your interest charge will wipe out any benefit you would have had from the reward points. This is quite important to understand because not only does your card have reward points (if you choose that) but the annual fee for a card with reward points is usually much higher as well.
The selection of reward programs on offer is greater than it has ever been. Travel could be an option, bonus points, discount rates, vouchers or even cash back rewards.
You can see why it is a good idea to sit down and evaluate your credit card use before doing your research so that you do not get carried away with one particular offer and ignore others that could be more cost effective. If you plan to get a card so that you can have a Christmas credit card spend, keep the limit low and don�t get carried away.
View our balance transfer credit card comparison for the best balance transfer deals.
Related posts:
- Review Your Spending To See If You Need To Get A Christmas Credit Card
- Guide To Christmas Spending
- We Are On The Countdown So Plan Your Christmas Spending
- Reducing your Christmas Credit Card debt
- How To Avoid Overspending On Your Credit Card Over The Christmas Holidays
- 24 Tips On How To Manage Your Christmas Credit Card Debt
- Christmas 2009 Credit Card Tips
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