12 Tips for Saving Money AND Your Credit During the Holidays


It happens every year. We get into the Christmas spirit, we become more generous, take advantage of special offers, party up a bit, and wind up spending far more than we should.  Then, just when we start our resolution of saving money in the new year, along come the credit card bills, reminding you of all of your bad spending decisions.

It’s even worse for people who are going to ‘wait until next year’ to buy a house. You may find that when your lender pulls your credit, they discover that either your credit scores went down, or that with your newfound debt you can’t afford a mortgage, or both.

So, with all that in mind, I bring you some timely tips that can save you money, and credit, during and after the holiday season, courtesy of the folks at Blue Water Credit:


1. Set a budget
Did you know that the average American plans on spending $812 on Christmas or holiday gifts? Most of us start with the gift in mind, not the cost. It’s easy to get out of hand if you don’t have a plan. This holiday season, set a realistic budget and stick to it, choosing gifts that fit within the budget.

2. Consider spending cash
Studies show that we spend far more when we pay for purchases with a credit or debit card compared to cash. So, go to the bank and take out the cash you’ll need, or use your ATM/debit card. You’ll spend less, and won’t wind up with big credit card bills in the new year.

3. Set gift limits
Have a conversation with your friends and family to determine if you’ll exchange gifts, how many, and set a spending limit. You may be surprised to hear that many of your friends would rather spend time with you or go out to dinner than receive a gift.

4. Don’t open store cards
Even if they offer you ‘20% off of your purchase today’, don’t do it! Applying for credit can hurt your credit score, and retail credit cards often have high interest rates, low balances, and hidden fees. If you MUST use credit, keep a responsible, low-interest card that gives you cash back or reward points.


5. Pull your credit
Forget the ‘free credit report’ companies you see advertised on TV. They sell your info to others, and only give you your history, not your score. If you want a free report, www.annualcreditreport.com is the best place for it. As with the others, you will get your credit history, not your score, but they don’t sell your info to lenders, and you’ll be able to monitor your credit activity.  If you want a report with score, contact Blue Water Credit, your mortgage lender, or www.myfico.com. No matter where you get it, you should review your credit report and score before and then after the holiday shopping blitz.

6. Be wary of identity theft
With approximately 20 million people having their identities used fraudulently this year, identity and data theft crimes are more prevalent than ever. On average, an identity theft victim sufferst losses of $9,650, up from just $3,500 a few years ago. So, review your credit report, don’t use credit cards on fishy sites, don’t ever make purchases or give your financial details on public or unprotected Wi-Fi networks, change passwords frequently, and generally stay vigilant and protected.

7. Don’t max out credit cards
It’s really easy to max out credit cards during the holidays, but that could cause serious harm to your credit score. Consumers with the highest scores (above 760) have average credit card utilization (balance vs limits) of 7%. Keeping your balance under 30 percent will keep your score healthy.


8. Make payments ahead of due date to protect your credit score
We all know our credit cards’ due dates, but did you also know each creditor has a ‘report date?’ That’s the day each month when they send their information into the credit bureaus.  If you use your credit card a lot and pay it down at the due date, the higher balance you carried will show on your credit report that month, because the Report Date was before Due Date. So a great tip to increase your credit score is to call your creditor, ask them what day they report, and make sure to pay your accounts off or down before that date – not the due date.

9. Check discount codes for online shopping
If you prefer to shop online from the comfort of your warm and cozy couch instead of battling crowds at the mall, you should take advantage of discount, or promo codes. These are like online coupons that allow you to save a money on your Internet purchases. The savings vary greatly – sometimes as little as 5%, or as much as 50%. Don’t despair if you don’t have a code – you can simply Google them or there are third-party websites that help track codes for free.

10. Have a plan to pay off debt
If you don’t do you your holiday shopping with credit cards, not cash, make sure you have a sound plan how and when you’ll pay them off. It’s best to pay it off in one lump sum before interest charges even kick in, but if that’s not possible, then set a schedule of extra payments you’ll make to get your card paid off at least within the first couple months of the next year.

11. Put some money aside for emergencies
Put a few hundred dollars aside in case of emergencies or special events over the holidays. If the water heater explodes Christmas morning, the car breaks down on the way to the office holiday party, or you run up your cell phone bill wishing everyone a happy New Year, you’ll be covered. Best of all, if nothing happens that warrants spending your emergency fund, you can use it to pay off debt, add it to savings, or invest the money.


12. Start saving for next year
Now that you’ve had a great holiday, it’s time to start thinking of next year! Open a separate savings account or out aside an envelope and deposit some money every month once you get paid, not to be used for anything else. Even $25 or $50 a month will add up to big bucks that can cover most of your holiday gift giving budget come next winter!

For more details, and to learn more about how Blue Water Credit can help your manage, improve and repair your credit, visit them at www.bluewatercredit.com, or call 916 315 9190.