Christmas is a time of giving and receiving, but as we approach this most dangerous time of the year for credit cards we’d like to give you a quick refresher on the best ways to use your plastic so you don’t end up with a Christmas hangover of the financial kind.
Time doesn’t cost money
Christmas usually means getting together with family and friends and of course, giving gifts to loved ones along with receiving them is a big part of the festive season. Sometimes it’s easy to get carried away with spending up big on gifts when spending time with our loved ones is the thing we cherish most. Here are a few tips on how you can reduce the cost of Christmas.
- Make, bake or create giving – Instead of buying gifts for your family and friends why not give them something you’ve made. Get the kids involved and create something special.
- The gift of time – Do you have family or friends with small children or other dependants? Why not give them a voucher for some time out! A night of babysitting is every parent’s dream and costs nothing.
- Secret Santa – If you have a large family, this could be a good option for you. Each person buys just one gift for one other person. Suggest a limit that is placed on how much each person spends to keep it manageable and fair.
- Christmas food – If you’re having Christmas at your place the cost adds up! Most people ask, ‘What can I bring?’ Take them up on their offer, people love to be able to help out and it can also reduce the cost for you, the host.
Some things to keep in mind when using your credit cards;
Cash advances cost more
Using your credit card to withdraw cash will incur an interest charge immediately and at a higher rate than on purchases. There is no interest-free period on cash advances. If you must take cash off your card for an emergency, repay it as quickly as possible. Don’t wait for your statement.
Rewards programs are not free
Credit cards with a “rewards program” come with an annual fee. This charge can be $100 or more per year, plus extra for any additional cards on your account. If you have a “rewards” card but haven’t been rewarded for your use in the past year, it might be a better idea to exchange your card for one without all the bells and whistles and no annual fee.
Read the fine print
Credit providers are required to state their terms and conditions in simple English so it is a worthwhile exercise to read through these documents when you are shopping around for a new card or when you are advised of a change to your current service. A slight misunderstanding can cost you money or reduce the benefits your card was supposed to deliver.
Credit cards can be a good way to manage your Christmas buying. The secret is to keep track of your spending so the statement isn’t a complete surprise and then pay off the full balance every month; otherwise, you could still be paying off this year’s Christmas a year from now.
This is factual information only and is not intended to be financial product advice, legal advice or tax advice, and should not be relied upon as such.
This information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
Braeside Wealth and its advisers are Authorised Representatives of Fortnum Private Wealth LTD ABN 54 139 889 535 AFSL 357306