The holidays can be a time of great stress. I’ve written many times about ways to make things calmer so you can get more joy, such asking people to bring food items to holiday dinners rather than exhausting yourself doing it all.
When it comes to your money, it’s also important to plan ahead to reduce stress.
Here are some tips from the FDIC, Federal Deposit Insurance Corporation, and others worth considering:
Make a plan and avoid holiday scams
Most people have experienced how gift giving that can impact their finances. Making a spending plan can help you balance priorities.
The following tips on credit cards, debit cards, and gift cards can help as you navigate holiday spending:
Create a gift list and comparison shop
Make a list of people you plan to shop for – family, friends, coworkers, and others. Determine what you plan to buy for each person and how much you’ll spend. A list will help you stay organized and give you a snapshot of total spending and where you may need to cut.
As you look at deals, compare prices at stores and online. Shopping for bargains can save you money and keep you within your budget. However, sales can lead to impulse buying and overspending, especially when buying items that aren’t on your list.
Track your purchases
Check off each gift as you buy it and record the amount spent or save the receipt. Saving receipts also will help with returns. This helps you know where you are with spending as the season progresses.
Use credit and debit cards strategically
Credit Cards. Credit cards offer convenience, rewards, and consumer protections, and they make it easier to track expenses. Federal law provides safeguards against inaccurate and unauthorized charges on them. It’s best to pay off balances promptly to avoid interest charges so you don’t have a depressing pile of debt in the New Year.
Debit Cards. If you’re using a debit card, federal law provides protections when you transfer funds at terminals at retailers and ATMs, as well as recurring withdrawals from your bank account.
However, credit cards have better consumer protections. Different laws govern credit and debit cards. Your liability for fraudulent charges with a credit card is usually capped at $50 and sometimes $0. With a debit card, you could, in the worst-case scenario, lose all of the money in your linked accounts.
Understand gift card terms and rules
Federal law provides protections when you buy merchant gift cards, which are sold by stores and restaurants. They can only be used at the stores and restaurants that sell them. Bank gift cards from a payment card network, for example, Visa, MasterCard, or American Express, also have legal protections, and they can be used wherever the brand is accepted.
Under federal requirements, gift cards can’t expire for at least five years from the date they were activated, and there are limits when certain fees can be charged. For example, a card issuer can’t charge an inactivity fee on a gift card unless there’s been no activity for one year and the issuer clearly states its policy. In addition, some states have separate laws that provide added protection.
Monitor account activity for fraud
Check your credit card statements or account activity on your mobile app or computer regularly for any unusual or unauthorized charges. Immediately report these transactions to your credit card issuer.
For tips on avoiding credit card fraud, see how to “Avoid Scams While Shopping Online for Bargains.” In addition, check with your bank or credit union to see if it offers spending and/or fraud alerts. Many banks and credit unions also offer apps so you can review transactions on your smart phone.
