Christmas Shopping for the Credit Conscious

According to the United States Census Bureau, holiday retail sales reached over $590 billion in the holiday season of 2013. This huge number represented a 3.1% increase over the previous season, and follows a pattern of steadily rising holiday sales since 2008. This year, the National Retail Foundation expects holiday retail sales to see a further increase of 4.1%. To put this into perspective, the sales from shopping during the holiday season, November and December, represents nearly 20% of the industry’s entire annual sales of $3.2 billion. This seasonal spending frenzy can be hell on your wallet, so we wanted to share some tips on how you can maintain, and even improve, your credit this holiday shopping season.

Set a Budget

The most obvious, although often most difficult, step to controlling your spending this holiday season is to set a budget. Your budget should be figured by estimating the amount you reasonably expect to spend on everyone for whom you will need to get gifts. Consider opening a separate account early on in the year, in which to keep the funds you have committed to gifts. Then, over the course of the year, add a little to the account each month until you have reached your goal. By the time you actually set out to take care of your Christmas shopping, it will feel less like spending money and more like a guilt free shopping spree! Of course, any funds that remain after you have finished your shopping can be used on another gift for someone from your list that has been extra good that year. (Or on yourself as a reward for being so budget conscious!) 

Make a List

Steal a page out of ol’ Saint Nick’s book by taking the time to actually right out a list of people for whom you will need to get gifts. For the sake of budgeting, you can divide this list into different tiers based on how much you plan on spending for the person’s gift. This is a good trick in order to get an idea of how much money you will need to set aside for your gift budget. Your phone is a perfect place to keep this list, since it will be kept private and you will almost always have it with you. With the list always at your side, so you can consult it whenever you are out and about. This way, you will be ready to snag gifts as you come across them, instead of desperately searching for the perfect present at the last minute.

Get a Credit Card

One way to get proactive about your credit this holiday shopping season is with a credit card. If you don’t already have one, the best place to start is going to be your bank. There are a few advantages that going to your bank offers over going directly to the credit card company. Even if you already have a credit card, your bank is likely to give you one with a lower interest rate, which is always a welcome offer. Additionally, most banks allow you to link your credit card to a checking or savings account that you keep at that bank. This way, you can make all of your gift purchases using your credit card, and then have the money transferred over before the end of the billing cycle. This will allow you to build up your credit score without sticking you with any interest charges!     

Check your Credit Score

The last tip for getting the most out of your holiday spending is to keep track of your credit score. The huge swell in consumer spending every year inevitably leads to an increase in identity theft, according to The Huffington Post. The increased use of credit cards in store and online, the surge of seasonal employees, and the large crowds all contribute to this seasonal spike in fraudulent charges. Make sure you are monitoring your credit score throughout the holiday shopping season. Contrary to popular belief, checking your own credit score through sites like Creditkarma.com does not in any way lower your credit score, because it is what is known as a soft inquiry.

All of these tips are intended not only to save you money, but also keep you in the spirit of the season. Buying gifts for friends and loved one is a joyous occasion, and that is all the easier to appreciate if your checkbook is enjoying it too.