|
By
their own account, one-third of U.S. households will spend more
than they can afford on gifts this holiday season, with the help
of one or more credit cards. A recent survey conducted by
LowerMyBills.com found that 50% of consumers are worried about
money before the holidays and money is the number one worry for
80% of consumers around the winter holidays.
"In 2003, the average American household carried an unpaid card
balance of more than $8000," said Matt Coffin, CEO and founder
of LowerMyBills.com. "One-time holiday purchases can strain a
budget and increase credit card debt for months afterwards, so
preventing over-spending is the best cure."
According this a
survey two thirds of the people who experience some sort of
financial concern around the holiday season feel it negatively
impacts their health. In addition, three-quarters of U.S.
households are at least somewhat likely to experience financial
difficulties after the holidays.
In 2004, 21
percent of U.S. households did not have enough money at the end
of the month to make ends meet, while 39 percent had just
enough.
Extra holiday
purchases on a credit card will typically take up to four months
or more to pay off, and by that time most people will have paid
at least 20 percent in additional interest on the new charges.
Matt Coffin offers the
following tips for managing credit spending over the holidays.
-
Create a budget
early in the fall. Be realistic and take in to account how
much you will spend on gifts, holiday travel and holiday
meals.
-
Pick just one
credit card to use. It is much easier to control credit card
spending with just one card than it is with three or four.
-
Search for low
interest cards with no annual fee.
-
Credit card
companies will often let you skip a payment or two around the
holidays. Don't fall for it -- you will pay more in interest
charges in the end.
-
Don't get a new
credit card just for holiday shopping.
-
Don't fall for
store cards that offer you cash back on your purchases.
-
If you carry a
balance, the 22.9 percent or higher interest you pay on those
purchases costs you more than the cash you get back.
-
CASH is still KING
-- people who use credit cards will spend up to 30% more on
gifts than people who pay in cash.
About
LowerMyBills.com
LowerMyBills.com is the premier, free online service for
consumers to compare the lowest rates on monthly bills and
reduce the cost of living. |
