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I received this letter from Santa and he asked me to pass it along to you:

Dear Consumers,

Ho ho ho! It’s that time of year again when I’m checking my list twice to see who has been naughty and who has been nice. (Confession: With a couple of names, I had to check three times). Usually you’re the one sending ME a letter at this time of year but I decided to send you this letter as an early gift.

This is a season when we love to be generous. After all, there are very few things in life that are better than a tree stuffed with gifts and the squeal of happy children as they tear off the paper and shout, “That’s just what I wanted!” I love the generosity at this time of year and I swear that the more generous you are, the brighter Rudolph’s nose glows!

But here’s the deal: Christmas is a time to be nice to other people, yet it shouldn’t be a time when you are naughty to yourself (and to your credit score). So here are three tips to help you make Christmas a great season for your family (and it will ensure that the rest of 2013 doesn’t feel like coal in your stocking).

1. Spend Only What You Can Afford

I want you to be generous this year with your family and your friends (that will definitely put you on the “nice” list!) but I don’t want you to be naughty to yourself by sending yourself into a spiral of debt. The economy is rough. Budgets are tight. Bills don’t always get paid on time. You have a challenge ahead of you to strike a balance between generosity and responsibility. Nothing warms my heart like a stocking full of gifts but nothing chills me to the bone like the massive credit card bills you can get in January… and the overdue notices that follow up in February and March. Remember that a good deal at the store right now is only a good deal if you can afford it. Otherwise, an overdue credit card bill can tack on as much as 20% of interest (or more!) to the price, thereby erasing any discount you might have received at the cash register.

2. Be Diligent with Your Information

In November and December, people go into a buying frenzy and they whip out their credit cards much more than the rest of the year. This can come back to haunt you if identity thieves get your information and use your credit to make their Christmas merry and bright. Only hand over your credit cards to stores or websites that you trust and keep all of your receipts so you can track what you spent and where. And in the new year, pull your Credit Report Card to make sure no one else is roasting their chestnuts over your open fire!

3. More Credit Doesn’t Make for a Happier Christmas

With more people in the stores, this is a time that shoppers are offered the chance to open a new store credit card account to get a discount on their purchase. But more credit cards (and yes, even good discounts) aren’t always worthwhile. Your credit score is impacted by the amount of new applications you have (as well as by the amount of debt and available credit you have). So a new account discount today might mean higher interest payments on your mortgage next year, which can melt the smile on happiest snowmen.

So keep the big picture in mind as you shop for gifts right now. Be generous to your family this Christmas but remember that maintaining good credit is a gift that keeps on giving throughout the year.

And for goodness’ sake: Please only leave out two cookies this year or else Mrs. Claus will add you to the naughty list if she has to resize the waist in my pants again.



Image: whistlepunch, via Flickr

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