Estimated read time: 2-3 minutes
Samantha Hayes ReportingChecking off the Christmas list can get expensive. And many of us find the real ghost of Christmas past comes in the form of the credit card bill.
Especially this week with all the great deals, it’s easy to think you are saving a lot of money, but if it stays on the credit card, over time you end up paying more. Sometimes the best financial advice comes in a simple form.
Kelsey Beutler: “20 is the limit and we can’t use over $20 or it comes out of our allowance.”
Credit cards give big kids a big allowance. The average American household has $9,200 in credit card debt, and will charge nearly $1300 over the holidays.
The trouble is some folks find six to seven months after Christmas they are still paying off the Christmas presents. And those deals that seemed so good at the time end up costing 10-20 percent more in interest payments.
Mike Hendren, Deseret First Credit Union: “I get reports of people paying their Christmas card debt back three, four, five years later.”
Credit cards are a lot safer than writing checks or carrying cash, but people tend to spend more with plastic.
Mike Hendren: “It’s great to go out and buy the gifts and be able to use them and make everybody happy, but it really requires a plan as to what they are going to do when Christmas is over.”
A recent associated press poll found young adults and those who make less than $25,000 a year were most likely to doubt their own ability to manage credit card costs. The average indebted adult between 25 and 34 spends nearly 25 cents of every dollar earned on debt payments, according to the Demos report.
Mike Hendren: “During Christmas time people need to be careful and understand it’s not always easy to pay it back.”
This may be something to look into, Deseret First Credit Union, along with many other financial institutions, now offers a free service to people trying to overcome credit card debt.