Holiday Shopping Tips to Help Protect Yourself

Highlights:

• It’s important to pay special attention to your credit use during the holiday season.
• Aim to limit your spending to as few accounts as possible so that it’s easier to track your purchases and keep up with payments.
• Stay on high alert for online scams as you do your holiday shopping.
• Consider your holiday budget prior to shopping to help avoid overspending.
• Check your credit statements throughout the season to be sure you recognize each purchase.

Between buying gifts, stocking up on decorations and opening your home to family and friends, it's normal for spending to ramp up during the holiday season. But if you're planning to use your credit cards even more than usual this year, here are some ways to help guard against overspending and the increased risk of fraud.

1. Monitor your accounts closely

With seasonal shopping, it's easy to get caught up in the excitement and lose track of how much you're spending. Plus, identity thieves know that consumers are especially vulnerable this time of year, so it's important to stay on top of your charges.

One helpful strategy is to enable automated notifications for your credit card accounts. Many credit companies will notify you whenever a purchase is made with your card. If you see a suspicious transaction, contact your credit card issuer as soon as possible to get more information and dispute the transaction if necessary.

2. Limit the number of credit cards you use to make purchases

It's hard, in general, to keep up with bills during the holiday season, but it's especially difficult if you're juggling multiple credit cards. Aim to limit your spending to as few accounts as possible so that it's easier to track your purchases and keep up with payments. A lower credit utilization rate can be a helpful part of maintaining good credit scores. Your credit utilization rate is the amount of credit you use versus your total available credit. Lenders ideally want to see a credit utilization at or below 30 percent.

3. Watch out for scams

Stay on high alert for online scams as you do your holiday shopping. Identity thieves can create websites that look legitimate in order to coax personal information from you, so only shop at stores you trust and double check the URL before providing credit card numbers or other information.

You also might notice an increase in spam phone calls and phishing emails as the year draws to a close. Scam artists and other bad actors will often pretend to be affiliated with your bank or a government entity and ask for things like your Social Security number or the passwords to your bank accounts. If you get a call asking for personal information — even if it appears to be from someone you currently do business with — hang up, call the company directly and ask for the fraud department.

4. Think carefully before opening store credit cards

During the holidays, retailers often offer special discounts for customers who sign up for their store credit card. These branded accounts may be a good option if you're already in the market for a new card and you shop with the retailer frequently. However, be careful: If you weren't looking for a new card before you started shopping, the checkout counter isn't usually the place to make a snap credit decision. Many store credit cards come with high interest rates, so it's easy to run up interest charges if you carry a balance.

5. Take precautions while traveling

There's usually a huge uptick in travel during the holiday season. While on the go, you might be tempted to use an establishment's free Wi-Fi. However, these networks are generally unsecured and can make you a target for hackers. To help keep your online activity more secure and better protect your personal information, use cellular data instead of public Wi-Fi whenever possible.

6. Create a budget for your holiday shopping

Create a list of gifts you want to purchase this season, along with the cost for each item. Add them up to understand what the outlay will be and make adjustments if the total is more than you can afford to spend. If you stick to your list, you will be less likely to overspend and more likely to comparison shop for the best prices. Next, calculate how long it will take to repay what you plan to spend on credit. This will help you stick to your budget and avoid buying more than you can afford to pay back.

By taking a few simple precautions and using your credit responsibly, you can enjoy the holiday season and enter the new year on strong financial footing.

7. Review your financial statements and credit reports regularly.

On your financial and bank account statements, you’ll want to ensure every transaction listed is accurate. The same is true for your credit reports – you want to make sure your information is accurate and complete. In addition, regularly reviewing these can help detect suspicious activity that may signal fraud or identity theft. You can create a myEquifax account and get free Equifax credit reports each year.