Paying the Bill - Now or Later

Now that the Christmas and other winter holidays have passed, take time to double check your bank and credit card statements.  In December, one major retailer had a breech of records and many people found items charged against their credit card or money drained from their bank account.

Constant monitoring of your accounts (online and in paper format) is a safest way to stay on top of potential problems anytime, especially after making major purchases, being on vacation, or holiday shopping.

Here are a few hints for before and after you shop:

1.  Following a budget is paramount when shopping.  Know who you are shopping for and what you are looking for.  Check store ads and web sites for prices.

2.  Many people prefer to use cash.  It can be a good option, and it can be a bad option.  Cash can be stolen and will not be replaced while a credit card or writing a check can offer a safety net.

3.  Know who is authorized to make purchases on the account and know where the card is stored.  One of the safest places for an unused credit card to be stored is in a safety deposit box.

4.  Keep all receipts to verify against your account.  Store them in a simple white envelope until you can justify your monthly statement.
 
5.  Know the timing for when fraudulent charges can be contested against your account.  The sooner you catch something questionable, the sooner the thief loses access to your account.

6.  View your credit report annually (more of this topic next month).


Now is the time to start planning for next year's vacation or holiday shopping.  Set up a "club" account for your vacation or next year's Christmas.  If your bank does not offer this type of bank accounts, open an account at a different bank and do not chose the option of access with a debit/credit card.  This will make the account accessible only when you physically go to the bank to deposit and withdrawal funds.  Make normal deposits into the account through payroll deductions or when extra money is available (birthday, tax refund, etc.).

Having these funds will make the bills easier to "swallow" when the occur.  Then you can enjoy spending this money and not feel the crunch of credit card bills after the event.