2007.10.23
Tips for curtailing holiday debt
This month we’ve discussed holiday shopping. Now, let’s talk about holiday spending.
An educational Web site, LivingWithBadCredit.com, recently reported that based on a survey, 67 percent of consumers who opened a store credit card during the 2006 holiday season still have not yet paid off the debt.
Some people still are paying for Christmas from last year, and we're only about a month away from the start of this year's holiday season!
The Web site urges consumers to be wary of opening store credit cards because they have high interest rates. The initial savings typically are not worth what you might pay in the long run. The survey also reports that women are more likely to have three or more store credit cards.
Here are some tips to avoid ending up with long-lasting holiday debt, from LivingWithBadCredit.com:
1) Don’t take out too many lines of credit at one time. This raises a red flag, and it can lower your credit score. New credit accounts for 10 percent of your total score.
2) Don’t jump into offers that have no interest or payments for 6 to 12 months. These offers could negatively impact your credit score, because they appear as maxed out lines of credit.
3) Know your card’s billing cycle. Don’t make a large purchase if it falls near the end of your billing cycle. Give yourself an extra month before interest accrues.
Let me know your tips for regulating credit card purchases during the holidays.
