6 Smart Ways to Safeguard Your Credit Score While Holiday Shopping

If your holiday spirit is high but your budget is tight, your credit score could take a hit. Between buying gifts, planning gatherings, mailing cards, and possibly traveling, it helps to stay disciplined with your spending.

Hillary Seiler, a Certified Financial Educator, National Certified Credit Counselor, and founder of Financial Footwork, shared her advice with MoneyLion.

Below are six tips from Seiler for keeping your credit score protected during the holiday shopping season.

1. Use One Card for Online Purchases

Holiday shopping usually climbs during this time of year, and Seiler says it is better not to spread purchases across multiple cards. Online buying can make it easy to lose track of how much you are spending.

“Use one credit card for online spending, turn on real-time alerts and review transactions every few days. That way, if a card number is compromised, you can address the fraud without putting the money in your checking account at risk,” she said.

2. Monitor Your Balance and Credit Report

Seiler explained that paying on time protects your payment history, but a high balance can still be reported to the credit bureaus if it remains on the card when the statement closes. She recommends making an extra payment before that date so your reported balance stays manageable compared with your credit limit.

You can also check your credit report regularly so you know where you stand and avoid unpleasant surprises. Experian, Equifax, and TransUnion let consumers access their credit reports for free at Annualcreditreport.com. Many credit cards also offer free credit alerts.

3. Set Up Autopay for at Least the Minimum

Payment history is the biggest factor in your credit score, making up 35% of the total. Missing due dates can hurt it, so automatic bill pay can be a useful safeguard during the holidays.

“Put at least the minimum payment on autopay, then schedule additional payments to cover what you spent,” Seiler said.

4. Avoid Opening a Store Card for a Small Discount

Maxing out a credit card is already risky, and opening more accounts just to chase a discount can make the problem worse. Holiday cashiers may push store credit cards, and the offer can be tempting when you are looking for savings. Still, the short-term deal may not be worth the impact on your credit.

Applying for a new credit card, especially several at once, can create hard inquiries on your credit report. Those inquiries can lower your score. “A 20% discount gets expensive when it leads to a new hard inquiry, another bill to manage, and spending you didn’t originally budget for,” Seiler said.

5. Watch for Charges You Don’t Recognize

The holiday season also brings a rise in scams and fraud, so it is important to stay alert. Sharing personal information such as your name, birth date, or Social Security number in exchange for special offers can put both your identity and credit score at risk. Fraudsters also commonly use phishing emails to trick people into responding.

“Turn on transaction alerts for every card you use. If you see a charge you don’t recognize, contact the company and lock the card right away,” Seiler said.

6. Treat Your Credit Limit as a Limit, Not a Spending Goal

“Decide your holiday number before you start shopping, keep a running total, and stop when you reach it. The easiest way to protect your score is to avoid running balances so high that repayment becomes a new year’s problem,” Seiler said.