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3 tips to optimize your holiday spending

By Justin Boyle

3 tips to optimize your holiday spending

Black Friday gets its name from the huge volume of retail sales that takes place on the day after Thanksgiving. That is, retailers can count on a massive influx of business to put their ledgers back into the black. To add even more income to the pile, retailers throw big sales and offer great deals to bring larger numbers of people through the doors.

Some of the deals available on Black Friday sound so good that you might be willing to put yourself in the red to make sure you catch them. This quick guide to managing your money throughout the holiday season can help keep your credit safe from the Black Friday rush, as well as leave you sitting pretty when January rolls around.

Tip #1: Cash, cash, cash

One of the main issues consumers have over the holiday season is simple overspending. They take their credit cards along to each shopping destination, and sometimes don't stop racking up purchases until they reach their spending limit.

It can be tough to keep your spending under control when you're getting no feedback about how much you're shelling out. If you pay for gifts in foldable paper rectangles rather than rigid plastic ones, it will serve as a constant tally of how much you're spending.

What's more, some online banks have started offering cash back and other rewards for using their debit cards. While these promotions may not rival the very best credit card reward programs, the security that comes with only spending money you know you have can offset a few points of difference in the reward structure.

Tip #2: Balance transfers and rewards

In the same way that retailers go wild with promotional deals over the holidays, credit companies sometimes offer promotional interest rates or reward packages that seem too good to be true. Luckily for some smart spenders, these credit promotions can be your ticket to a strong credit showing over the holidays.

For example, if you're approved for credit cards with balance transfer promotions, you can charge your holiday purchases to a card with spending rewards and then move the amount to a zero interest balance transfer card. That way, not only can you earn points, air miles or cash for shopping on your rewards account, but you'll save on interest for the time it takes to pay off your gift bills.

As always with credit card promotions, however, keep your mind on your money. These zero percent balance transfer promotions can expire fairly quickly, and they might stick you with an astronomical APR after the promotion is ended.

Tip #3: Forget Black Friday, try Gravy Thursday

Some retailers trot out their screaming holiday deals on Turkey Day itself, if their locations open their doors on holiday afternoons. You or another member of your family can be given leave from preparing for the festivities to check out a few pre-Black Friday sales and hopefully return from the near-deserted shops with a discount bounty.

If you're serious about avoiding the maddening crowds of Black Friday but still want a shot at the savings, it can't hurt to call ahead to local retailers and see if Thanksgiving Day shopping might be the answer.

Final thoughts on keeping holiday spending under control

Matthew Shay, CEO of the National Retail Foundation (NRF), makes a compelling point: "When it comes to retail growth this holiday season, slow and steady wins the race . . . and the same is true for shoppers who are meticulously calculating the best ways to stretch their dollar."

Mr. Shay's advice, like that of many personal finance experts, encourages careful strategy before you hit the holiday shops. If you're planning to use credit cards with miles promotions, zero interest balance transfers or any other limited-time offer to energize your holiday dollar, make sure you take the time to find the best credit card reward programs. A little research can go a long way toward preventing Black Friday from becoming Red January.

Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.

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