How to Protect Your Credit During the Holidays

If we’ve learned anything from the multitude of credit breaches and cyberattacks in recent years, it’s that we must be diligent when protecting our credit—all year round! But it’s especially important during the holidays. The additional spending combined with the frenzy to get everything done may sometimes result in us letting down our guard when it comes to security.

Here are some additional tips to stay safe during this hectic time.

1. Check your credit score before the shopping bonanza begins. If you’re going to be using your credit card, the last thing you want is to be declined at checkout. Make sure there are no errors. If you find something that’s suspect, contact the credit bureaus and dispute it immediately. Get one free credit report from each of the three bureaus—head over to annualcreditreport.com to request yours.




2. Don’t fall for the retail credit card offers. And there will be plenty! They are all over the checkout stand, tempting you with pretty colors and saving 10% on all those gifts in your cart. Even though that’s a great deal, the low credit limits and high interest rates don’t often make it worthwhile. Using the bulk of a low credit limit can increase your credit utilization percentage, which will lower your credit score.




3. Note your interest rates pre-shopping trip. You may have had a decent interest rate when you first got the credit card, but it’s possible that the rate has gone up since the introductory period. If you plan to make purchases totaling more than you can pay before the due date, you’ll accrue interest. Use the card with the lowest interest rate—less interest means you will pay off the balance faster.




4. Be eagle-eyed when it comes to identity theft. Identity theft is a year-round issue, but it’s especially prevalent during the holidays. Best tips for in-store shopping: double-check that you got your credit card back after making a purchase and always take your receipt. If you’re shopping online (and, really, who isn’t?), look for security symbols, like VeriSign or TRUSTe, to signify the site is secure and encrypted.




5. Don’t let distractions keep you from paying your bills—on time! Between the parties, shopping, decorating, baking and the quest for joy and cheer, it’s easy to let payment dates inadvertently pass by. A huge chunk of your credit score is calculated based on your payment history—about 35%! It’s not worth it to miss a payment just because you got distracted. Set up automatic payments for just the minimum payment. That way, you won’t get dinged for a late payment—and you can always pay more if you want.




6. Stick to your budget. Take the time to create a holiday budget. Write down the people you want to buy for and assign a dollar figure to each name. Add it all up, this is your budget. If you experience a bit of sticker-shock, make some adjustments and re-total until you have an affordable list.