5 Steps for using credit responsively for holiday shopping

We would never recommend using credit for holiday shopping, but we know many people are planning on doing so. According to a study by Harris Poll for NerdWallet and TransUnion, people in relationships are likely to take on approximately $200 in credit card debt to purchase gifts for their significant others.

Using credit for things you cannot immediately afford is one sure way to have debt snowball into large, unmanageable sums, and potentially lead to needing a bankruptcy lawyer in West Palm Beach. However, if used responsively, credit can have positive effects beyond the initial purchase, such as improving your credit score.

How to use credit cards responsibly during the holidays:

• Create a budget with your debt-payoff date in mind. When calculating your budget, you should plan on paying off your debt in about three months. The further out you plan, the more likely it is that unforeseeable circumstances might interfere with your payoff goal. With this three-month period in mind, calculate how much you can pay monthly toward the debt and use that figure to determine what you can spend.

• Use a credit card with 0% APR. Many credit cards offer an introductory rate of 0% APR, which ranges from three months to a year. As long as you have a budget in place, this arrangement will allow you to spend without accruing interest.

• Decrease spending over the holiday season. Review your expenses. See if there are specific items you can temporarily save money on, such as putting a pause on your gym membership, washing your own car instead of going to the carwash, or taking lunch with you to work more often.

• Make payments to your credit card on time. Credit cards that offer no-interest introductory rates still require monthly payments. Be sure to make your payments on time to avoid late charges.

• Keep abreast of your outstanding debt. Check your balance regularly, and chip away at it as much as possible. If you receive unexpected additional income, put it straight towards the credit card balance to pay it off quicker.

At Kelley Kaplan & Eller, our belief is that education is key in the prevention of bankruptcy. However, if you find yourself in need of a bankruptcy lawyer in West Palm Beach, know that we are here to assist. Schedule a consultation today if you have questions regarding a potential bankruptcy or if you are ready to begin the process.