AFFIL’s holiday season credit tips

Americans for Fairness in Lending just released a tip sheet for holiday shoppers. The holidays are huge for retailers, which means they can be catastrophic for consumers.

My number one tip: set a budget for holiday spending and stick to it. If you can do that, you won’t have to worry about credit at all.

It’s December, and as you face the mounting pressure of the winter holiday gift-buying season, STOP and take time to protect yourself from credit card tricks and traps. To help, Americans for Fairness in Lending is sharing these tips to consider before you break out the plastic. Adapted from “Credit Card Tips for College Students,” Consumers Union © 1998-2007.

1. Don’t get tricked, trapped or suckered into a card with bad terms. If you want a credit card, get one with a long-term low interest rate (APR). If you get a low introductory rate, chances are it’ll start at 0% and then jump to 20% with one almost-on-time-but-didn’t-quite-make-it payment. Still want a credit card? Just know what you’re in for…

2. Once you choose a card, don’t let your guard down. Credit card companies are notorious for changing rules and playing GOTCHA. Look through those mailings they send… they may include a nasty change in terms.

3. Pay your bill on time. Better yet, pay it several days ahead of time. If the due date is on a Sunday and your payment (duh) arrives on Monday – you’re late! Don’t laugh, this is REALLY common. And when you’re late – see (1) above, your interest rate jacks up.

4. Pay your bill in full. Whenever possible. And as quickly as you can.

5. Do not go over your credit limit. And set the credit limit as low as possible. Don’t be fooled – credit card companies LOVE to give you a credit limit you can’t afford.

6. Stay as far away from a credit card ‘cash advance’ as you can. The interest rate on cash advances is MUCH higher and credit card companies apply any payment you make to whatever else you owe first. That cash advance hangs around unpaid and with increasing interest until you DO pay your bill in full. Did we already mention that they’re looking to get you?

7. Ignore those in-store “15% off today if you sign up for our credit card” offers. You’ll pay back what you saved and then some REAL fast.

8. Carry only one card. Less confusion. How many companies do you want abusing you at once?

9. If you do get into credit card debt, get help right away. Don’t wait until it gets worse. Try the Consumer Action Help Desk.

10. Remember your other option: CASH.