is often a popular theme during the holiday season – too much food, too much
drink and too much spending. Over spending at the holidays can easily push you
into serious and troublesome financial situations, or aggravate existing debt
plan ahead to make your debt more manageable and your holidays more enjoyable!
can present the illusion that we can spend more than we can actually afford.
Here is why you should limit your credit card spending this holiday season:
with credit cards can end up costing more when you add in the months of finance
charges you will pay.
carried on your credit card(s) can negatively affect your credit rating.
expenses or life changes can postpone your credit card payment plan lengthening
your credit card debt and increasing your interest payments.
avoiding holiday debt
Once you have
decided to manage your holiday debt this season, here are some ideas to avoid
Spending cash instead of using credit for your purchases will help to avoid
debt. Put some money aside each paycheck and use that for your holiday
Set up a
budget. Set up a spending limit and stick to it. Racking up more debt than you
can repay will lead to trouble in the New Year as you struggle to figure out
how to pay for those charges. Save yourself some future stress by only
purchasing what you can repay in full when your bill comes.
Hold a family
meeting. Discuss holiday plans and voice your concerns.
Make a list.
Avoid splurging on gifts. Keep them simple and meaningful rather than expensive
Start shopping early and make monthly payments. It will take the stress out of
last minute gift buying and will not add to holiday debt.
Do not shop for
yourself. Avoid “one for you, one for me!”
sales. Falling for the “Buy 2, Get 1 Free” could have you end up spending more
than you normally would.
credit cards at home. Without your credit cards, you will have a hard time
charging them up.
Do not buy if
you cannot afford to pay. Using your credit card means you are borrowing from
your future income. Only charge what you can afford to pay off later.
shopping online first. The Internet makes it easy to shop around and harder to
buy on impulse. Since most retailers have inventory on their websites, you can
decide exactly what you want to buy before going to the mall.
Do not open new
accounts just for the discount. Retail stores may encourage you to sign up for
their store credit cards and even offer a discount on your purchase. Resist the
temptation to apply for new accounts just to purchase more gifts. The inquiries
affect your credit score and you risk charging more than you can afford.
Do not let
someone else holiday shop with your credit card. If you loan your credit card
to someone else, you have no control over how much they are spending on gifts.
Do not leave
your credit card unattended. There is a lot going on during the holiday season.
Your credit card is targeted more during this time of the year than any other
time. Keep it close to you and never out of your sight.
If credit card
debt over the holidays was unavoidable, put together a plan to get rid of that
debt as quickly as possible. Some options could include:
Tally it up. A
list of how much you spent on gifts, food, entertaining and other
holiday-related expenses, will help you set realistic goals for paying it off
and knowing, for future reference, how much your family spends on holidays.
Decide on how much you can take out of your monthly budget to pay off your
holiday debt. Keep in mind – you need to pay more than the minimum to make a
dent in your credit card debt. A few temporary cutbacks in other areas now will
help you pay off your debt faster.
stop credit card spending. Set limits on day-to-day purchases until you can
catch up from the holidays.
Take advantage of 0% transfer offers allowing you to pay off the debt over a
longer period of time. Caution: Be aware of any transfer fees involved and the
interest rate being charged after the promotion.
of income. Consider temporarily taking a part-time job to help pay off debt. Be
creative and turn a hobby into a side business. But be careful of easy cash
business opportunities that are too good to be true – because they are!
Pay off debt
with bonus money. Use your tax refund or bonus money to pay off debt before
putting it into savings, making a large purchase or taking a vacation.
fall behind in paying creditors may be contacted by debt collectors. The
Federal Fair Debt Collection Practices Act prohibits debt collectors from using
harassing, oppressive or abusive tactics when attempting to collect owed money.
They cannot use false statements or engage in unfair practices in the
performance of their work.
If you feel you
need more help in solving your debt and credit problems consider contacting the
nearest office of the National Foundation for Credit Counseling (NFCC). NFCCs
are local, non-profit organizations, providing education and counseling on
personal budgeting and the wise use of credit. Services are free or for a
reasonable fee. For the nearest NFCC office, check the phone book white pages
or call (800) 388-2227.