5 Tips to Control Credit-Card Use

Understand the costs: Unless you pay your balance in full each month, you'll end up paying more than the sticker price for your gifts this year. The longer it takes to pay down your balance, the more you end up paying overall for that sweater, toy or vacation. To get a sense of how much more, check out the online Credit Card Calculator at BankingMyWay.com. For example, if you make the 2% minimum payment on a balance of $832 (the average amount consumers plan on spending this holiday, according to the NRF) on a card with an annual interest rate of 15%, you'll end up paying a total of $1,674.

Track your spending: To avoid buyer's remorse when you open your credit card bill in January, consider keeping track of how much you've spent, as you spend it. It's easy to lose track of what you've bought when all you have to do is swipe a card at checkout. Consider making a holiday budget and crossing off items as you buy them. Alternatively, write down everything that you bought at the end of the day and keep a running tab of how much you've spent. That way you can make changes in your shopping plans if you find yourself spending more than you can afford.

Plan ahead: For next year, consider switching from credit to cash for your holiday shopping. Plan ahead and put away a few dollars every paycheck throughout the year to make sure you have enough to cover your holiday expenses. Best of all, the pay-as-you-go approach doesn't require the same care as does shopping with credit because it's difficult to dig too deep a financial hole when your spending is limited by the cash in your wallet. And, besides, the feel of forking over a pile of Andrew Jacksons will help control spending a lot better than swiping and signing on the dotted line.