Don’t Overspend This Holiday Season
Cash or credit? It’s probably one of the most important decisions you’ll make this holiday shopping season.
Almost half of consumers expect to charge an average of $100 to $500 more than usual on their credit cards during the holidays, according to a recent myFICO.com survey. And for many people it will take up to six months to pay off these bills.
“It’s important to not get caught up in the season and overspend during the holidays,” said Michael McAuliffe, president of the nonprofit Family Credit Management Services. “Charging your purchases is not the problem. Emotional or impulse spending is the problem, and credit cards simply make it easier.”
The experts at Family Credit Management are offering some tips to help avoid sinking into extra debt this season:
Create a detailed holiday shopping budget this year by listing how much you will spend on every person on your list. Then total the amounts. If the total is too high, decide whether to scale back on the purchases or give to fewer people. Whatever you do, make sure it’s a realistic budget that you won’t regret after the holidays.
Avoiding “window shopping” (in-store or online), which increases the temptation to buy items not on your list. But when you are shopping, either locally or online, check out coupon Web sites and in-store discounts to see if they apply to your list.
When shopping online beware of “recommendation software” that convinces you to buy things that a few minutes earlier you didn’t even know existed. If your life was fine five minutes ago without it, you don’t need it now.
Use a debit card instead of credit, but make sure you know how much is in your account — you don’t want to bounce checks or be charged overdraft fees.
Steer clear of new department store credit card offers of immediate savings. They usually charge higher interest rates than the major cards such as Visa or Master- Card and will simply add to your debt. Just opening one may negatively affect your credit score.
Make your own gifts. The most cherished gifts are frequently the “heirloom gifts,” passed down through family members. Or you can use your existing talents and skills to create thoughtful gifts, such as writing a short story for your favorite niece and nephew.
For additional holiday shopping tips, general money management tips or a spending plan, visit www.familycredit.org.