Christmas 2024 Shop

Holiday Debt

Did you know that Americans spent $53.3 billion dollars this year during the holiday season – between November 2nd and December 27th? $53.3 billion. And that’s up 15% from last year. To make money matters worse, there are 6% of people that are still paying off last years holiday purchasing debt.

A smaller and yet perhaps scarier number is the average amount of debt that credit-card holding Americans are in. As most of us will break out the plastic during the holiday season, we also have to dig our way out of that debt, and stay out of it – it isn’t healthy to plan on not paying other bills or banking on getting a large tax return – that isn’t a sustainable choice and is one that you should avoid at all costs.

Make A Plan For Next Year

You’re going to want to plan for next year – right now! Yes, now. Look what happened to you this year, and you didn’t create a plan. So do that.

It doesn’t have to be an itemized list of the gifts that you are going to get each person, but sit down and seriously consider who you are going to be buying gifts for and why – or, even break it up into larger groups, like “Office”, “Acquaintances”, “Friends” and “Family.” Create a budget for each of those groups, or even each of those people – but stick to that budget.

If you are planning on making larger purchases for next holiday, like you just know you’re going to need a new computer, or you want to get your husband a tablet, or you know you’re going to want to get a lot of toys for little Bobby’s 5th Christmas, build that into your annual budget. And if you decide that it’s the best option, a lot of companies will have layaway programs, or the ability to open a credit card with no interest for a specific time period. Make sure that you look into their full policy, though, as many of the no-interest credit cards will have very steep interest rates after the no-interest period that take into consideration the initial balance that was on the card.

Pay Triple Your Minimum Balance

Yes, triple. Don’t just pay off your minimum balance! Did you know that with the debt of an average American ($5,400) it would take 11 years and nearly $13,000 to pay if you only paid the minimum due?

Don’t do that. Please.

Don’t Open Another Credit Card

…or close your current one after you pay it off. Credit changes of that sort can be interpreted as signs of instability when it comes time for a credit evaluation. So once you pay off your heavy balance, keep a manageable balance on the credit card (something that you can pay off in full every month) and keep that line of credit open.

Don’t be tempted to open another credit card, either – for whatever reason you may think that is a good idea. Or, if you’re someone who falls into the ‘retail therapy’ category, put your cards on ice right now. Don’t add more debt to your already heavy load.

The only time where opening another credit card is a good idea would be a low-interest rate card that would give you the ability to transfer balances. There are pros and cons to transferring all your balances to one card, but the biggest one is that you only have to deal with one bill.

Create Goals and Track Your Progress

We all look forward to getting things done – and make paying off your credit card debt a part of that goal/reward system in your life. And track how you’re doing! There are a lot of personal finance platforms out there – like, say, Mint – that will help you keep track of your finance goals.

Ann Michaels works with Christmas Night, a company that offers nativity scenes and other Christmas decorations – she hopes that everyone came out of their holidays well both fiscally and spiritually.

Related articles

• Saving Interest with a Balance Transfer (debt-consolidation-2u.com)
• Stock Carnival Ecstasy – January 10, 2012 (fastswings.blogspot.com)