‘Tis the season to be jolly.. falaalala la la la la la… Did I do that right? It’s the holidays, my favorite time of the year. The time we usually max out our credit cards in hopes of getting everyone the perfect gift but I’m here to remind you NOT to max out and help you still get everyone the perfect gift.

First things first! Give yourself a holiday spending goal, ESPECIALLY if you’re doing your holiday shopping on credit. I usually start prepping my clients for the holidays in August, since it’s the last month of the summer and right before the holiday season begins. My best advice is DO NOT do your entire holiday shopping on credit, unless you’re starting your shopping in September then that gives you enough time to swipe and pay back and do it all over again. Give yourself a cash spending goal and a credit spending goal. My goal this year was $500.00 cash saving and $200.00 credit spending. During the last month of summer put yourself on a strict spending diet. Don’t go out unless it’s a birthday, enjoy your August nights at the park on a nice blanket with fresh fruits rather than at the roof top bar.. At least that’s where I’m usually during the summer, lol.

Now let’s get back to how you can shop smart on credit. Are all of your credit cards paid in full? That is one of the most important keys when Christmas shopping on credit! Make sure before adding anymore debt, your credit card balances are cleared. Once you’ve confirmed all balances are cleared, give yourself a credit spending amount. What is the total amount of credit you’d like to spend? You may want to spend $500 on credit and break that down onto three different credit cards making sure you only spend under 30% of the credit limit on each card. Now, breaking $500 down onto three different credit cards mean you’d have to spend a maximum of $156 on each card to split the $500 credit limit three ways.. This is the tricky part, would $156 be 30% or less than the credit spending limit? It depends, if you have 3 credit cards and the highest credit limit is $300 you would be surpassing your 30% on that card. So, what now? Let’s increase your credit limit!! Contact your bank and ask for a credit increase. Increase each credit card by $500-$1,000.00, now your overall credit balance increases and your utilization rate lowers. Now you can spend $156 comfortably on each card without maxing out any credit card and still keeping your utilization rate under 30%.

I wouldn’t recommend doing your entire holiday shopping on credit but if you have too remember my favorite saying “If you can’t buy twice, don’t swipe!” Always keep that in mind when shopping on credit. You always want to keep in mind how soon you can pay the balance off, the sooner the better. Do not pay the minimum balance and if you can try making double payments towards the credit card balance. Before you know it, your balance will be paid in full! With low balances such as $156 you want to take care of that entire balance sooner than later. Why? Because if you pay the entire balance by the end of month, the following month you’ll be able to use the exact amount without affecting your utilization rate. Why? Because you aren’t adding any new debt!

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