It’s the holiday season, and while you are out gift shopping, you may be wondering- how am I going to pay for this? Even if you have the funds, you still may not be sure if you should pay cash or put on a credit card? Cash is always the safest way to shop if you are looking to keep bills down and stick to a budget better, but in some circumstances credit may be the smartest medium for your purchase.
Regardless of how you pay for your gifts, make it your personal goal to avoid accruing debt this holiday season! Save the credit cards for large purchases, and consider putting them on a low interest card to avoid racking up the balance. Check out your perks for different cards; what is the bonus point system like, will you receive cash back or purchase protection, does your card offer an extended warranty or insurance on the product? Once you find out the details about your cards rewards and perks, then you can make a decision if it is worth it to put the purchase on the card.
Still, cash is the best to bring with you when shopping for gifts. The best way to prevent overspending is bring your ideal limit with you in cash and leave the cards at home! Make a budget with the maximum amount of money you can afford to spend on gifts this year. Before you even leave the house, make a list of what you intend to buy and the costs. Mapping out what you plan to purchase will prevent you from going over your total allotted budget. Then bring a little bit over (50 dollars max) the amount you estimated (but under your total gift buying budget) to ensure you have enough money for tax and any minimal but unexpected purchases (batteries for a toy, etc.). If you see something at the store that is out of your budget for the trip, don’t buy it! You can always come back or find it someplace else! Consider writing it down or taking a picture of it with your phone so that you can decide later if it is really something you need or want. Make sure your total gift budget has a little extra money in it that you may not be planning on spending. Leaving a little cushion will help you fund any unexpected (or forgotten) gifts you may have to buy before the holiday season is over!
If you enjoy the perks of credit cards during the holiday season but aren’t sure if you can control your spending, try a store debit card. Target and Nordstrom are examples of stores that offer store debit cards as an alternative to their high interest store credit cards. These store debit cards work the same way as a bank debit card would, but offer the same rewards as the retail store credit card, but without the worry of bills or interest.
Also, make sure you check your debit cards policies and see if your bank offers any cash back rewards for using your debit card at certain stores/products.
Remember, the holiday season may put a weight on your wallet, but if you rack up the credit card bills during the holiday season, you will find no relief in the new year!