In 2015, Americans spent almost $70 billion on Black Friday. There can be no doubt that the day after Thanksgiving sees a huge quantity of holiday shopping, both in stores and online. As savvy shoppers cruise stores and surf the web for the best Black Friday deals, it’s important to make sure that you have the best Black Friday experience that you can. Avoid Black Friday credit card debt with smart credit card use during the holidays.
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Budget Your Black Friday Spending
You should always keep a budget for your holiday spending. However, this credit card strategy is more important than ever on Black Friday, when tempting deals and the pressure to spend can easily push your over your credit limit or cause you to rack up a credit card balance that’s too big for you to pay off.
Before you get behind the wheel of your shopping cart, evaluate your finances. Think about how much you intend to spend on holiday shopping in general. Are you going to do all of your holiday shopping on Black Friday or are you just looking for a few items? Given your income and outstanding debt, how much can you reasonably expect to spend on holiday shopping in general? Ask yourself these questions before you swipe your credit card on Black Friday so that you aren’t surprised by your credit card bill come December and January.
Shop for Credit Card Rewards on Black Friday
If you’re confident that you have good rewards on your credit card, treat those rewards as an asset when it comes to Black Friday shopping. Use your holiday spending in order to boost yourself towards your rewards goals and then turn those rewards around, either to top off your gift list or to pay for a post-holiday vacation for yourself.
Since rewards programs typically require cardholders to hit some sort of spending benchmark on their credit cards, Black Friday and the holiday season in general make for a great time to get that credit card spending done and collect your rewards. Just remember to take advantage of those rewards before they expire.
Avoid Credit Card Fees
Credit card fees can be easy to accumulate during the holiday season, when you’re using your card much more than usual, and you might be too busy to challenge any fees that you see as unfair. There are three credit card fee traps that are easy to fall into during the holiday shopping season. However, with the right spending habits, these fees are just as easy to avoid.
- Over-Limit Fees: When you open an account with a credit card company, they will usually establish a maximum line of credit with you. This is the total amount of money that they will let you use through your credit card during a given billing cycle. Since there is so much spending on Black Friday and throughout the holiday season, it can be easy to go over this credit limit and be hit with an over-limit fee. Make sure to account for your credit limit when you’re making your holiday gift shopping budget.
- Late Fees: If you forget or are unable to pay your credit card balance by your billing due date, then you will be hit with a late fee. Avoid this fee by budgeting carefully — don’t spend more than you will be able to pay off by the end of the billing cycle.
- Charge-Offs: A charge-off isn’t exactly a fee. Instead, it’s something much worse. If you miss enough credit card payments, then your credit card company will apply a charge-off to your credit history, devastating your credit score. If your holiday shopping habits have gotten you into deep credit card debt, try negotiating with your credit card company to find a repayment plan.
Buy the Right Things on Black Friday
With deals and “sale” signs plastered from wall to wall, it can be tempting to let yourself go during Black Friday. However, don’t let the flash signs lure you in. If possible, make a plan for what you intend to buy during Black Friday and stick to it.
You should also avoid faux deals. Compare sale prices to standard prices and don’t get sucked into bad deals. A common sale tactic used by some retailers is to mark items down in small ways to make it seem like you’re getting a great deal, when you really aren’t. For example, marking a $410 television down to $399 makes it seem like a great deal, since the 4 has gone down to a 3, but in reality it’s only about a 3 percent savings.
Keep in mind that even good Black Friday deals might not be the best prices you’ll encounter during the holiday season. If your credit card offers price guarantee or price protection services, watch prices closely throughout the holiday season. It will be up to you to identify better prices and collect your refund on those deals.
Black Friday sees an incredible amount of credit card usage. Make sure that you’re using your credit card reasonably for all of your holiday shopping by budgeting wisely, avoiding unnecessary credit card fees, and taking advantage of the best deals on Black Friday items.
Gearing up to stand in line for Black Friday? Take some time to learn more about credit cards and how to use them at our credit card resource center and pass some time while you wait for the stores to open.
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