Be Credit-Smart This Holiday Season


Better Call Security

You need some credit, but you've looked over your credit report and it's less-than-perfect. You may also be hesitant to respond to card offers for fear of dinging your credit history. In some cases, you may wish to apply for a secured credit card.

Secured credit cards work the exact same as unsecured cards. However, instead of a credit card company simply extending credit, the card holder must send a "security deposit" to the card company. Secured card companies, such as FutureCard and First National Bank, will then calculate how much credit to extend to you, based on the amount of your deposit and your own credit history.

Secured credit card companies typically match your credit card limit to your deposit dollar-for-dollar. A $500 deposit will give you a $500 credit card limit. Some companies may double or triple the credit, if they believe your payment history warrants it. But at least with a secured card, you have the convenience of a credit card, and can begin rebuilding a favorable credit history.

Good Credit Means Savings

As retailers and shoppers alike get ready for this holiday season, keep this in mind: the better your credit history, the lower your credit costs will be.

Having a good credit card history takes time to build. But if you over-extend yourself this holiday season, maxing out your card or missing a payment or two, you may see the cost of using that card rise dramatically.

This season, consider buying your toys and gifts ahead of time. Begin buying a couple of months in advance. Not only will you avoid the hassle of last-minute shopping, but you'll have a much clearer picture of what you're spending.

Be sure to properly document each purchase you make. When using credit for holiday shopping, it's easy to overspend since, technically, you're paying with someone else's money. Don't live by the belief that you can "always pay it off tomorrow." Tomorrow may come sooner than you think.

Also, consider preparing a special "holiday budget" ahead of time. Write a list of who you need to shop for, and how much you want to spend on them. And once you have your list, stick to it! Don't overspend. That way, you'll ensure you're not spending too much for the convenience of using your credit card... and be credit smart.