JONESBORO, Ark. (KAIT) - People are feeling pressured to buy gifts for the holidays, resulting in higher use of credit cards.
Consumers tend to overextend themselves and run up their credit limit to the point where they almost max out their credit cards, leading one’s credit score to drop, along with an increase in their interest rates.
According to Blake Guinn, Vice President of Retail Banking & Marketing at First National Bank, a high credit limit does not mean that the money is free.
“You should take a good hard look at the money that you have coming in versus the money you’re about to spend and make sure you stay with your means,” Guinn said, “That is a trap that a lot of folks fall into is ‘I got it, I can spend it’ and the minimum payment may be small, but that adds up over time.”
Guinn says that it is best to use your debit card first to avoid spending money you don’t have, but if you need to use a credit card, you should use it based on how much you can payback.