10 Holiday shopping, spending, and credit tips from Blue Water Credit

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The holidays are here again, and Americans are flocking to malls, their favorite stores, and especially shopping online. In fact, the average person will spend $1,506 on gifts and other seasonal purchases from the day you’re eating turkey leftovers until you wake up and it’s a new year.

And while we’re all feeling festive, it’s also good to mind your money when it comes to holiday shopping – and spending. It’s the time of year to plan, organize, check balances, and protect your credit score and identity MORE, not less.

That’s easier said than done, as there will be added temptations for sure. Retailers understand that they make 15-25% of their entire annual revenue during this period, so the sales, promotions, ads, and alluring financing options will be as abundant as ornaments on the Christmas tree.

Luckily, Blue Water Credit is here to help guide and protect you, so you can properly manage your finances, keep a great credit score, AND thoroughly enjoy your holiday this year.

  1. Budget

Sit down and map out how much you ideally want to spend this holiday season, and where. Remember to add an additional cushion for unplanned purchases but remember that impulse buys are usually the ones that cost us the most. Chances are that if you don’t have some sort of spending target or ceiling, you’ll spend WAY more than you’d like this holiday season!


  1. Cash not credit

So, you put that nice $100 gift on your credit card? If you actually stopped to do the math, you may be paying for that item for many months or even years, and probably spend $150, $200, or much more thanks to the interest your credit card charges! Since you now have a budget, go to the ATM and take out cash, or at least have money on hand to immediately pay off any online purchases. You’ll thank us later!


  1. Limit gift giving

Do you have that one relative or friend who always one-ups you every holiday? I mean, if you buy a wonderful $150 gift, he or she always swoops in with a pricier (and let’s face it, better!) present? Holiday spending can get out of control – hurting the finances of everyone involved – so set a limit on the amount or number of gifts. It’s not a fun conversation to have, but others will be relieved, too.


  1. Say “NO!” to opening store cards

One of the ways stores, brands, and retailers “get ya” is by offering a great deal at the point of purchase IF you apply for their new credit account. Sure, you may save 20% that day, but that’s because you’ll end up paying exponentially more in interest charges – or even card fees! These store cards are also deemed less desirable by the credit bureaus and can drop your score, so that’s a hard pass!


  1. Make payments before their due date – or report date

During the holidays, it’s not enough to send every payment and pay every bill by its due date. There’s too much going on, websites crash, mail gets bogged down, and everyone is inundated. Even if you did send a payment on time, it could post late (or not show up at all), which will really wreck your credit score. So, it’s preferable to pay well before the due date. Each credit card actually has a Report Date which you can find out just by calling them, and if you pay before that date, extra balances and spending won’t report to the credit bureaus, protecting your FICO Score!


  1. Check the codes

Most people are shopping online these days, and that’s a trend that won’t change any time soon. But before you hop on Amazon, eBay, Walmart, Zappos, or whatever favorite website you’re patronizing these days, do a quick Google search for discount and coupon codes. There are plenty of legitimate codes out there that will save you a few bucks to up to 50% off your purchase – all for free! Just make sure to use reputable coupon and discount code websites and never give personal or financial information to get them.


  1. Give a gift they will REALLY remember!

Your friends and family may WANT that new iPhone, expensive sneakers that will be out of style next year, or a pricey bottle of wine, but do they really NEED those things? (Well, they probably do need the wine!).

Why not revolutionize gift giving by presenting something that actually helps them, like book about finances, a little money in a brokerage account you started for them, or kicking off the kids’ college fund?


  1. Fraud and identity theft are WAY up during the holidays

These days, financial fraud and ID theft are rampant, expected to affect more than 20 million people this year while siphoning off $50 billion dollars. And scammers and hackers are more sophisticated and emboldened than ever, taking advantage of free-spending, busy times like the holiday shopping season. So, sit down with your family and discuss the Dos and Don’ts that will keep you from getting hacked, robbed, or your identity stolen, and be extra careful with mail and sharing online data. We have some great tips for you if you need them!


  1. Stop before you max out that credit card!

It’s easy to pay for everything with credit cards when you’re running around and spending liberally during the holidays, and the tab from those meals, holiday parties, and gift giving really add up. But be careful not to max out your credit cards because that will seriously hamper your score. Even better, keep your credit utilization ratio below 30%, and those with the highest scores only spend 7-10% of their available credit or less!


  1. Check your credit

It’s a good idea to pull your credit score and report, before and then after the holiday season again. Not only are you looking for errors (which happen A LOT), but late payments, signs of fraud, and even identity theft. Each of the three major credit bureaus offer a free credit report once per year at www.annualcreditreport.com but skip the supposedly “free” credit report offers that are anything but – just contact us if you need guidance.


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