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The Front Porch Blog

Education on all things homeownership

Holiday Spending vs. Your Credit Score

November 13, 2017 Featured

The leaves are falling as the winds begin to cool. Lights are hung along the streets while your favorite holiday songs play everywhere you go. You can’t help but get into the holiday spirit and spread cheer amongst your friends and family. We get it; it’s the best part of the season! But before you swipe away that credit card, consider these common shopping mistakes that may hurt your credit score!

1. Maxing out your cards

It seems like this would be the most obvious rule, but it happens every day (especially during the holidays)! Even if you regularly make every payment, there is always a negative impact when a high balance is shown on your card. You want to stay as far away from the credit limit as possible.

2. Using a low-limit card

While you shouldn’t blow your limit on one card, it is also not a good idea to bank on your lower-limit cards. The lower the limit, the more likely you will reach it. As mentioned earlier, your goal is to stay way below to avoid any credit dings.

3. Opening up new store cards

Would you like to save 10% on your purchase today by signing up for our card?” NO, YOU WOULD NOT. As tempting as it may be, do not fall into opening numerous cards this holiday. Having multiple cards will only raise red flags to the credit bureau and may hurt your score.

4. Taking deferred-interest cards

While this may give you the option to make smaller payments, often times, these cards have unreasonably high-interest rates. If you do miss a payment, you’d be accumulating a drastic amount of interest that may leave you deeper in debt in the long run.

5. Closing all your cards

Closing all your credit cards is not the solution! This should be your absolute last option. Keep in mind that your credit score will be dinged each time you open a card and also when you close one.

We hope you find this to be helpful for this season! Shop cautiously, happy holidays!