Thrifty Thinking: Black Friday and Credit Cards

Disclosure: I received complimentary products to facilitate this post. All opinions are my own.

Beverly Harzog, a nationally regarded credit card expert, consumer advocate, and author of the new book, "CONFESSIONS OF A CREDIT JUNKIE: Everything You Need to Know To Avoid the Mistakes I Made" (Career Press, Nov 2013) shares tips on how to use credit cards to pay off debt, get free trips, and improve your credit rating.

#1: Make a holiday budget and stick to it.
Start by making a list of everyone who will receive a gift and decide how much you’ll spend on each person. Don’t forget to include holiday bonuses you want to give to those who provide services for you, such as your babysitter or your mail carrier.

#2: Check your credit card limits before you shop.
If you use more than 30 percent of your credit limit, your credit score could drop. This is important to keep in mind if you’re planning to refinance your mortgage or get an auto loan anytime soon.

#3: Use a credit card for online purchases.
Use the Internet to compare prices and find the best deal. When you make a purchase online, always use a credit card. This gives you more consumer protections. With a credit card, if the site gets hacked, you have limited liability.

And always check the URL to make sure you’re on a secure site. A nonsecure website has a URL that begins with http://.... A secure website has an extra “s” in the URL: https://...

#5: Track your credit card spending.
You can do this by using free money management software such as Mint. Or just hang onto receipts and keep a running total. If you don’t know how much you’re spending, you’re unlikely to stay within your budget. The goal is to pay your bill in full when it arrives. If you go over budget and your cash flow can’t cover it, you’ll carry a balance and pay interest expense.

#6: Just say no to retail credit cards.
Retail cards often have very high interest rates. So when the clerk is ringing up your purchase and offers you a 10 percent discount if you open an account, it’s best to say no. If it’s a store where you shop frequently, ask to take the information with you. That way, you can read it and make an informed decision about the card.

#7: Take advantage of cash back credit cards
Some cash back credit cards have 5 percent bonus categories that change quarterly. The categories during the holiday season can help you save money on gifts. For instance, the Chase Freedom card offers 5 percent cash back on Amazon.com and on select department stores through December 31. You do have to enroll online to get the 5 percent cash back rewards.

#8: Don’t be afraid to use more than one credit card
This strategy can save you lots of money. If you have more than one card, use the card that benefits you the most based on the store and type of purchase.

For instance, with expensive purchases, use a credit card that gives you the best extended warranty and purchase protection. Or if you’re shopping online, use a credit card that offers rewards for online purchases. Even using your airline miles card is a good strategy if you’re trying to earn miles to travel during the holidays.

#8: Save more by using your credit card’s online shopping mall

Most major issuers offer some form of an online mall. During the holidays, you might find big discounts at specific stores. Check out this possibility before you head to the mall. It could save you money as well as time.

#9: Monitor your credit card accounts online
Identity theft rises during the holiday season. Check your credit card accounts online a few times a week. This is a great way to spot identity theft in the early stages.

#10: Put away the credits cards when you reach your budget
This is absolutely essential. When your spending reaches the budget limits you’ve set, step away from the credit cards. Use only cash from this point forward. If you give in to temptation and exceed your holiday budget, you could still be paying for your purchases in the summer of 2014.