Now’s the time to curb credit card holiday debt
The holidays are a time of generosity and giving, but most people probably don't consider extra interest payments to their financial institution to be part of the holiday spirit.
Americans will spend on average more than $1,500 per family on holiday purchases this year, leaving a pile of debt that will remain long after the tree trimmings are packed away.
The good news is, it's not too late to avoid excessive credit card debt over the holidays. It could be as easy as following these five holiday spending tips from member-owned credit unions and the Kansas Credit Union Association (KCUA):
How much is too much?
Make a list of what you expect to buy this holiday season, and then add up what you think everything will cost. Don't forget to include food and travel, as well as gifts. When you come up with a total figure, think hard about whether or not you can afford to spend that much and where you might cut back. Then stick to your budget.
Cash or charge?
If your total monthly debt payments, not including your house payment or rent, amount to more than 20 percent of your net income, you are in danger of being over-extended. Scale back, and think about using cash instead of credit this holiday season.
Shop for credit cards before you shop for gifts
Shop around for credit cards with no or low annual fees and competitive interest rates. The
Consumer Federation of America recently reported that rates on cards issued from not-for-profit credit unions average about three percentage points less than for-profit bank cards. Consumers using these not-for-profit credit union cards will save about $160 in financing charges on a $1,000 debt-if making the minimum monthly payments. Be careful, though. Late payments can result in penalty fees and could trigger an increase of up to 15 percent in the bank card's rate. So be sure to make the payments on time during the rest of the holiday season.