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How to avoid a New Year’s credit card hangover

This time of year, most of our credit cards are getting an extra workout, whether through online or in-store holiday shopping. Using credit cards to make your purchases isn’t always a bad thing — especially if you have a card that gives you membership rewards or cash back. However, it you don’t use and pay them off wisely, you could find yourself still paying for your 2016 presents when next Christmas rolls around.

There are some important things you can do to avoid ending up with credit card bills in January that are too much to handle. You can also avoid ending up paying interest and fees that make your purchases far more expensive than they were. For the most part, it involves having some discipline and reading the fine print when it comes to credit card offers.

— Avoid getting store credit cards unless it’s a retailer where you shop regularly. Many stores offer a nice discount on your first purchase if you apply for one of their cards. However, if you don’t pay off the balance every month, you could end up paying far more than you saved on that one-time discount.– Be careful about deferred payment deals. It’s common for retailers to advertise no payments for years. However, if you don’t pay off the full amount when it comes due, you could end up owing hundreds of dollars for an electronic gadget you sold at a garage sale for a $1.00 a couple of years after you bought it.– Keep track of your spending. After a day of shopping, it’s easy to toss your receipts in a drawer without realizing just how much you’ve spent. Create a Christmas budget (for gifts, entertainment, decorations and other expenses) and work to stick to it.

If you’re someone for whom credit card spending regularly gets out of control, stick to good old-fashioned cash or at least debit cards. Seeing the money disappear from your wallet or your bank account as you spend it may be more painful in the moment, but it’s better than waking up to a New Year’s credit card hangover.

If you are already mired in credit card debt or find yourself in that position after the holidays, an experienced New York bankruptcy attorney can provide guidance on your options for getting your finances back on track in 2017.

Source: U.S. News and World Report, “6 Credit Card Blunders to Avoid This Holiday Season,” Nov. 22, 2016

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