Get ready America, the Holiday Shopping Circus is rolling into your town again this year and no one is immune from the excitement it generates.
Least of all someone with a credit card.
Whether it’s early-bird specials on big-screen televisions or deep discounts on jewelry and fashion or last-minute splurges on sporting goods, many people think they can have it all during the holidays.
All it takes is one quick swipe of a credit card.
“People definitely spend more freely during the holidays,” said Rod Griffin, Director of Public Affairs for Experian, one of the three major credit reporting bureaus in the country. “A lot of that is the ease of purchasing with a credit card. With online purchasing, you don’t even have to leave your living room to buy something, just by putting in your card number.
“And because it’s so easy, it puts them at a greater risk of overspending. Sometimes, they just need to stop and think.”
Average Bill For Holiday Spending: $730
Well, the rent, utilities, groceries, gas, car payments, doctor’s bills and other common necessities that eat up the monthly family budget. Those bills don’t go away in November and December, though you’d never know it the way some people push them aside in favor of spending on a new computer or gold bracelet.
That National Retail Federation says that the average American adult spent $730 on Christmas gifts in 2013. That’s $730 per person, or $1,460 if you count Mom and Dad, most of it spent between Black Friday and Christmas Eve.
Try adding $1,460 worth of spending to the budget during any four-week period the rest of the year and see if there isn’t some trouble making ends meet.
“Holiday spending is not a life-and-death matter, though it can feel like it sometimes,” Griffin said. “People should take care of the things that matter first like rent, food and paying for heat.
“But that can be difficult when you’re in a store over the holidays and you have a little one looking up at you with tears in her eyes while she’s pointing at something you know you can’t afford to buy.”
Credit Cards Get Max Usage In December
The pressure to get something special for everyone on your gift list is there throughout the holiday season, but it’s nothing like the pressure you feel when the credit card bill comes due.
Credit card debt is at its highest point at the end of December every year. The Federal Reserve Board says that in December of 2013, credit card debt jumped $5 billion over what it was in November. That makes for a financial mess in a lot of homes when the mail arrives in January.
“It always comes back to budgeting,” Griffin said. “People don’t like that word – call it a spending plan if you like – but you need to know where your money is going and how much you have left for discretionary spending.
“When you don’t have a spending plan, you are more likely to make impulse buys and that’s where you start getting in trouble.”
There is a suggestion Griffin offers for avoiding the blues that come with holiday bills: After you put together a “spending plan” for the holidays, put together a “repayment plan” that sets goals for when you intend to pay it off.
“The repayment plan is really going to come in handy in January,” Griffin said. “But only if you’re going to stick to it.”
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].
- Ginnis, K. (2014, May 1) The Long And Short Of America’s Consumer Holidays. Retrieved from https://nrf.com/news/the-long-and-short-of-americas-consumer-holidays
- NA, ND. Consumer Credit – G.19. Retrieved from http://www.federalreserve.gov/releases/g19/20140207/