Day Seven: Check This List Twice Before You Start Shopping

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Now that you know more than you ever thought there was to know about using plastic for your holiday shopping, here is a check list to go over before you start chanting the holiday mantra: Debit or credit.

1. Use credit and debit cards wisely this holiday season. This is a no-brainer, but we have to say it.
2. Have you started your holiday shopping yet? If you haven’t, you’re not alone.

According to a Consumer Reports Holiday Shopping Poll, only 22 percent of consumers anticipate finishing holiday shopping right after Thanksgiving, compared to 30 percent in 2006. About 45 percent of respondents said they do not anticipate finishing their shopping until the second week of December, and 20 percent said they would be pushing it right to Dec. 24th. Approximately 6 percent of respondents are resigned not to complete their shopping until after the holidays.

About 23 percent of respondents said they expect to spend less this year than in 2006.
If you want to be in this 23 percent and control your spending, consider making a budget before you begin to shop.
In the survey, among the 33 percent of consumers who made a budget for last year, 43 percent managed to stay on budget, with only 8 percent going way over budget.

Don't let finance charges and other fees push you over your budget. To keep from spending more than you have to, use the payment method that makes the most sense for you.

If you pay off your credit card balance in full each month, charging your holiday gifts won’t cost you anything in finance costs, and may even provide a bonus in the form of a cash-back or other type of reward.

If you’d rather spend only what you have on hand but don’t wish to carry large amounts of cash, use a debit card. But be aware that if your bank account balance is inadequate to cover your purchase, you can be hit with large overdraft fees. Click here for more information on how to decide the best method of payment.

Just say no to extended warranties. They are usually not worth the money.

According to the Consumer Reports survey, when buying home electronics or major appliances, 37 percent of consumers will opt for an extended warranty. This percentage is down 5 percent from 2006, when 42 percent of consumers said they would purchase one.

Consistent with last year’s findings, 69 percent of shoppers age 18-34 are more likely to opt for an extended warranty than others. And 36 percent of consumers age 35-54 said they would purchase an extended warranty, while only 27 percent of those 55 and older said they would.

Check the APR.

You'll usually find a higher APR on a private-label card than on a co-branded card from the same store. The Target credit card, for instance, comes with a 24.24 percent APR. The APR on a Target Visa credit card, on the other hand, will depend on your credit rating. It starts as low as 13.24 percent and tops out at 22.24 percent.

1. When considering a store card or co-branded card, the questions to ask before you sign up are:
2. What is the APR?
3. What is the credit limit?
4. Is there a reward program?
5. Can you manage the account online?
6. Does the card have zero liability protection?

With either a store card or a co-branded card, the APR will always be lower than a private-label card.