Six personal finance tips for the holidays
The holidays are a wonderful time to be together with friends and family and enjoy gift-giving but the post-holiday season can be a stressful time when the bills from those purchases come due. ACA International, the Association of Credit and Collection Professionals, offers helpful personal finance tips for U.S. consumer.
"Being mindful of your financial goals and knowing how credit works are important tools to effectively managing personal finances during the holiday season," said ACA International CEO Pat Morris. "Good financial habits can help ensure a sound financial future, and being armed with knowledge can help you maintain that all-important good credit score."
Plan and budget.
Holiday gift giving doesn't need to break the bank; after all, it's the thought that counts. Determine what you can reasonably afford, create a budget for gifts to track spending, and stick to it. Good budgeting and spending habits last a lifetime.
Understand credit and use it wisely.
When used properly credit can be helpful but, if not, credit can become a difficult burden. Purchasing gifts using a credit card means they will still have to be paid for at some point. Know the terms and conditions of your credit cards; shop for low interest rates; make payments on time; and understand the ramifications of making a late payment or missing a payment. Know the ins and outs of credit reporting and its impacts on building a good credit score, which is used to determine eligibility for future credit including credit cards, auto loans and home mortgages.
Communicate.
Having trouble making payments or getting calls and letters about a debt? Don't ignore them. If you are having trouble making payments, contact the creditor to discuss alternative payment arrangement options. It won't eliminate your debt but it can make things more manageable. If you are being contacted by a debt collector, talk with them to be sure the debt is indeed yours, and discuss applicable repayment options. Remember, they aren't the enemy. Legitimate debt collectors only wish to contact you in order to discuss the account, verify its accuracy, and work on a helpful plan for resolution.
Know your rights.
Consumers have important rights when contacted by a creditor or debt collector. For more information about working with a debt collector visit www.askdoctordebt.org. It's a free resource that does not require login or the sharing of personal information.
Active military have special privileges.
The Servicemembers Civil Relief Act allows active military and, in a few cases, non-service members, to suspend or postpone certain civil obligations. A lender, creditor or insurer is prohibited by law from taking any adverse actions against military personnel because they exercised their rights under SCRA, which can only be exercised while engaged in active duty; including full-time training; annual training duty; and attendance at a service school while in active military service.
Protect personal and financial information.
Be careful about giving out information including a credit card information, bank account, or Social Security number over the phone and online until certain of the authenticity of the other party. Monitor accounts and immediately report any suspicious or unauthorized purchases to your bank or credit card provider. Importantly, consumers should also monitor their credit report. If you believe your identity has been stolen, contact your local police department and visit www.ftc.gov/idtheft for information on what you should do.
ACA International (www.acainternational.org) is the comprehensive, knowledge-based resource for the credit and collection industry. Founded in 1939, ACA brings together nearly 4,000 members in the United States and abroad, and their more than 230,000 employees, including third-party collection agencies, asset buyers, attorneys, creditors and vendor affiliates.