A few things to bear in mind to give your credit score a break and maybe save you a few bucks.
When you write about money, 'tis the season to be buried in an avalanche of holiday shopping- and spending-related e-mails. While the sheer volume of messages highlighting survey findings and budget-saving tips is overwhelming, some actually contain valuable tidbits. Here's a peek inside my in-box:
Keep your credit score in check. If you're planning to use your credit card this holiday season, consider how purchases may affect your credit score. You certainly don't want to go over the limit, or charge too much on one card. A tip from the credit bureau TransUnion: Put a Post-it in your pocket: "Before starting your holiday shopping, obtain your credit report and make note of your account balances and available credit. Take a Post-it note, place it on the back of your card and at the top write how much you've allocated to spend. Maintain your credit card account balances below 30 percent of your available credit limits." (Get your credit report free at www.annualcreditreport.com.) An online survey from credit-scoring company FICO found only a sliver of respondents -- just 5 percent -- use as much as 75 percent or more of their total credit limits over the holidays. Like me, 35 percent of consumers say they charge all of their holiday purchases. But I always pay mine off come January and save the rewards I earn to redeem gift cards for next Christmas.
Watch out for Red Tuesday. What's that you say? Red Tuesday is the phrase coined by the Association of Independent Consumer Credit Counseling Agencies for the day after too much shopping on Black Friday and Cyber Monday. It's no fun, but sit down before heading out to the stores and take a hard look at your bank balances. Then consider the amount of money coming in between now and when your credit card bill is due. Ask yourself how much you can really afford to spend. The hottest gadget isn't worth the headache of a credit card bill come the new year.
Shave your gift list this year. According to a recent Visa holiday spending survey, 42 percent of people are considering gift exchanges this year. This is the first time that Visa asked this question. But Visa personal finance expert Jason Alderman said he thinks exchanges (such as drawing names to give one gift rather than buying something for everyone) and other frugal measures are here to stay. "Even as the economy slowly recovers, a lot of the fast-found habits we've learned in the last couple, three years we're keeping," he said, adding that he has instituted more gift exchanges in his family and is considering one on his wife's side this year. "It used to feel like being a cheapskate. Now it feels like being sensible."
New rules for gift cards. Americans plan to spend an average of $145.61 on the plastic presents, up from $139.91 last holiday. Gift cards are topping holiday wish lists for the fourth year in a row, according to the National Retail Federation. Thanks to the CARD Act, there are new rules that make gift cards even more attractive this year, such as cards that can't expire for at least five years and that carry no inactivity fees for at least 12 months. But it's still important to read the fine print before you buy. Check out the Federal Reserve's list of new rules at www.federalreserve.gov/consumerinfo/wyntk_giftcards.htm and Bankrate's handy chart of gift cards and restrictions featuring 56 retailers, restaurants and bank cards at www.bankrate.com/finance/credit-cards/2010-gift-card-study-results.aspx
Smart shopping tips from Consumer Reports' holiday shopping guide. My favorites: Request a price guarantee. "Ask if the retailer has a low-price guarantee -- which entitles shoppers to a refund of the difference between the new price and the original price paid if the item goes on sale or if it's offered cheaper elsewhere. Seven to 15 days are the norm for most price adjustments." Study return policies carefully. "The blanket policy for most products at big-box stores is 90 days but may be shorter for electronics. Some merchants extend the return period for holiday purchases, but they reserve the right to refuse to take back anything without an original or gift receipt, especially if the item was bought with cash. Even if a store agrees to take an item back without a receipt, it may only issue you a gift card or store credit slip in exchange. And shoppers will get back the value of the lowest price the item actually sold for, not necessarily the value of the price paid for it. Receipts are needed to take advantage of warranty services." I particularly liked this reminder: Keep your receipts. We've had two pricey electronic items go kaflooey during the warranty period. Read more at: www.consumerreports/holiday.
Kara McGuire • 612-673-7293 or firstname.lastname@example.org