This year, according to the American Research Group, Inc., American shoppers will spend an average of $861 this holiday season. With the busiest shopping season of the year in full-swing, many consumers use credit cards to make their holiday purchases, without considering the potential consequences.

While credit cards help shoppers make convenient online purchases or allow consumers to take advantage of special offers – it is important to remember that these purchases can directly affect your credit score.

The factor that contributes the most substantially at 35 percent to your credit score, is payment history. When considering your holiday shopping purchases and budget, be mindful to make all monthly payments on time to protect your credit score. Staying within your monthly budget will help you make these payments on time.

How much you owe accounts for 30 percent of an individual’s risk score, which is why running up excessive balances on credit cards can have negative consequences for your credit score. It is important for shoppers to create a budget within their means and stick to it, without excessively running up the balance on credit cards. Using cash to pay for gifts, rather than using credit cards can help minimize unnecessary spending. Anytime you exceed 50 percent of the reported limit, this causes a negative impact on your credit.

With types of credit and new credit each accounting for 10 percent when determining a credit score, consumers should think over the possible negative consequences on their credit score with the in-store incentives to sign up for credit cards. While these offers may offer an up-front advantage for large purchases such as electronics and jewelry; it is important to consider the potential lasting effects on your credit score. Opening several new lines of credit over the course of the holiday season can also impact your score negatively.

Major retail stores offer incentives when you open a line of credit with them. Remembering that not all credit cards are created equal can help protect a consumer’s credit score. When considering whether or not to sign up for an in-store credit card, shoppers should make sure the offer comes from an A-rated card, backed by a reliable financial company and major credit card provider.

Additionally, credit history accounts for 15 percent of a consumer’s risk score. Using old cards, rather than opening several new lines of credit for holiday shopping is a great way to keep your credit score from suffering negative consequences. Consider limiting your purchases to a couple of accounts with longer payment history and keeping each balance below 30 percent of your credit limit.   

With the holiday shopping season in full swing, it is important to remember to take extra precautions against online and identity thieves. Identity theft is on the rise and remembering to protect yourself while shopping online can prevent a temporary decrease in your credit score, while you work to return to your pre-theft status.

Spend time focusing on family and friends this holiday season rather than the stress of worrying about dip in your credit score with these helpful tips for holiday purchases.