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It’s holiday countdown time: Do you know when to use that credit card?

Take a few simple steps before you pull out that credit card.
Take a few simple steps before you pull out that credit card. AP

We’re closing in on the holiday season. That means travel, shopping and unexpected outings with old friends. During this season of spending, it seems a little inevitable to use your credit card. Here are some ideas about deciding when and how to use credit, so you don’t kick off the new year with extra financial stress once it’s all over.

Consider using your card when . . .

You have a payment plan in mind.

Let’s say you know you want to spend $500 this month on gifts, but don’t have that in cash at the moment. If you know that in the term of your billing cycle, you’ll be able to save that and make a full payment on your card — since you aren’t spending $500 on gifts next month — that would be an appropriate time to consider charging your purchases.

You have a good rewards program.

When you are able to pay in full right away, the benefit of choosing your credit card over your debit card can come down to the extras. Unless you have a checking account that pays you back, you are likely to get more travel points, cash back or perks from using your credit card. Plus, check with your card provider to see if there’s a holiday deal on earning even more.

You are traveling.

You may not know it, but oftentimes there are better security and insurance policies attached to your credit card. Check with your card provider for the exact parameters of your card’s insurance, but most come equipped with something — enough to give you peace of mind making transactions in unfamiliar places.

Avoid using your card when . . .

You don’t have any foreseeable plan to pay it back.

Credit cards aren’t free money, but sometimes they feel that way. If you don’t have the money now, and have no idea how you may get it in the immediate future, it’s not wise to put it on credit. Between late fees and interest charges, you’ll end up owing even more in the long run.

You’ve used 30 percent of your credit limit.

One good rule of thumb: To stay in the grace of good credit, you shouldn’t have more than 30 percent of your limit borrowed at one time. It’s not an exact number, because your credit score is based on much more, but assigning a limit to stay within your limit can be just the motivation spenders need to stick to their budget.

When it comes to the holidays, it’s an easy time to get into a comparison with how your colleagues and neighbors celebrate. However, spending aside, there are plenty of ways to enjoy the holiday season with your family without breaking the bank. Remember to savor the memories more than the stuff, and embrace the traditions that make your holidays perfect every year.

Kat’s Money Corner is posted on Dollars & Sense every Tuesday. Kat Hnatyshyn, when not blogging or caring for her little ones, is a manager with CommunityAmerica Credit Union. For more financial chatter, visit