5 Tips for Smart Holiday Shopping
By Nathan Grant
If Black Friday and Cyber Monday sales haven’t already been checked off your holiday shopping list, then now is the perfect time to get the rest of your shopping done before the holidays come and go. In the haste to get your shopping done between now and the holiday, it is important to remember several important things so that you spend smarter, safer, and to make the process easier on yourself overall.
1. Buying with Cash
Buying with cash can be beneficial if you don't trust yourself with credit cards by forcing you to only spend money you have on hand. When you are trying to catch holiday sales and compete with other shoppers, it can be easy to fall into the temptation of putting everything on credit cards and worrying about paying off the debt later. Carry only what cash you need for planned purchases, and make multiple stops to the ATM to get more money if needed.
2. Choosing the Right Retail Store Cards
Retailers know that spending with credit is a seemingly easy option for most consumers doing their holiday shopping, and offer their own store-specific retail credit cards. Unless you plan on shopping at a specific brand of store frequently and their rewards programs make sense for you personally, then there's probably a better credit card than a store-specific one. Many times the credit limits are relatively low and the interest rates are higher than traditional credit cards offered by big banks. Alternatively, some retailers offer store debit cards, which can give you some of the same rewards and benefits as their credit card offerings but are tied to your bank account and don’t require a credit inquiry, which can affect your overall credit scores.
3. Safe Online Shopping
Whether it is around the holidays or year round, a majority of shopping these days is done online. Ensure that you are making online purchases on a private and secured network as identity thieves can take advantage of the vulnerabilities that can come from being on an open network. If a wifi network doesn’t require a password to access, unencrypted data can be made visible to any other computer or device on the network. Additionally, look at the URL in your address bar for any online shopping and look for both a lock symbol next to the address, and for an “https” in the beginning of the URL.
4. Using Credit vs. Debit
Another good practice is using a credit card versus a debit card for online and in-store purchases. If your card is compromised and fraudulent charges show up on your account activity, or if the card becomes lost or stolen, a credit card can be instantly reported and fraudulent charges can be disputed right away. With a debit card, your own money from the bank account the debit card is attached to is instantly spent and every bank handles fraud disputes in their own way, which could put you in a difficult position if you are waiting without the stolen money for the issue to be resolved.
If you think you are the victim of fraud this holiday season, freeze your credit and contact the authorities and notify your financial institutions right away. Keep a list of the contact numbers for all of your credit and debit cards at home so if you need to contact one of them over a stolen card, you can take action immediately.
5. Virtual Credit Cards
Many card issuers offer what is called a “virtual credit card” which are digital versions of actual physical credit cards. They have their own account numbers and can even be used for a single transaction. This can add another layer of financial security and convenience if a credit card is compromised during an online transaction because it can be canceled and doesn’t affect your actual credit account directly. You also don’t have to worry about canceling your account and getting a new physical card reissued.
Planning ahead for smarter holiday decisions in the future is never too late. Budget your holiday gifting expenditure limits based on your financial situation, and save ahead of time to build a larger pool for gift purchases next year. You can easily start saving money for next year using mobile banking apps that can automatically set aside rounded up change from purchases into a separate savings account so that when the holidays come up again you have a fund dedicated for holiday spending. Also be sure to look back at some of our other holiday spending tips that can help you this year and beyond.