5 Signs That Santa’s Credit Score Sucks

Santa Claus: great guy, huge tradition, cyclical job. Worried about the overall holiday retail figures? Maybe. Bad credit score? Probably. Here’s why:

1. Santa probably opens all those store cards to save money. Hey, many of us have done this.  The pitch:  “Save 15% when you open a [insert retailer name here] card”.  Sure, you may save $50 now, but you might end up paying $50/mth more if that new card inquiry lowers your credit score and you need to refinance or purchase something big….like a home or car.
   



2. Santa has too large a shopping list. People who shop more tend to have more debt.  This is one reason why older people have better credit.  They don’t need as much stuff, so they spend less.  Nobody shops more than Santa.  Sure his workshop builds some products, but by the looks of his operations in the movies, you’d think he’d be asking for a bailout package to help build toys more efficiently. His factory floor makes GM look impressive.   I believe in Santa Claus, but building Wii’s at the North Pole? I don’t think so.  He’s definitely spending a lot of money on gifts.  For those of you who think he’s using his business credit for this, ask a small business owner about that.  Most small businesses have their personal credit impacted by running their business.  American Express told me a business needs $2MM in annual revenue to have a credit card that doesn’t hit their personal credit.  I’ve never heard of Santa collecting a dime in revenue, so his credit could be rough.
   



3. Santa travels too much. The bad part about traveling is those pesky expenses.  If your company is slow to reimburse you, you might be impacting your own credit score to keep up. This is especially true if you want reward points, you may use your own credit card over the company card — great for points, bad for your credit score.  At least Santa seems to avoid the fancy dinners and gets a lot of free cookies and milk.  Ah, the joys of being able to stop time and fly private and cost free [although that reindeer food must cost something].
4. Santa’s heating bill at the North Pole is probably prohibitive. Ironically, according to Experian’s average credit score by state, Texas, a warmer weather state, has the lowest credit scores in the country.  So, I’m not sure this argument holds much weight. Still, the North Pole lifestyle must lead to more online and late night QVC-type shopping.  Makes me wonder, are nationwide purchases higher in February then August?  If so, is it because people are trapped indoors and can’t get out?  A winter storm used to mean disaster for retailers, but with online stores, it often benefits them now.



5. Santa seems to have an “Old School” marriage. In old school marriages, people communicate about money less, scratch that, they communicate less in general.  No, I can’t prove this, I just watch people at restaurants. Young married couples argue at least, older married couples often don’t say a word.  My data points are a bit dated as Mrs. Claus doesn’t make many appearances in the mainstream media – US magazine, are you listening?  If I watch the oldie but goodie “Year without a Santa Claus” or “Rudolph”, I never see them talking about money.  Look, it’s possible that the Claus family is similar to many families and engages in a bit of “financial infidelity”.  That always leads to credit challenges.

Moral:  Don’t make the mistakes that Santa is forced to make.  Be smart about using your credit cards this holiday season.  Remind yourself that mortgage rates may soon hit the lowest rates in years.  The fed is considering 4.5% 30-year rates.  You don’t want to miss out on these rates just because of some holiday credit behavior.

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