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Don't let the 'debt industry' ruin Christmas

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Like all Americans, many Capital Region families will head to consumer counseling agencies in January and February, and most of that traffic is propelled by holiday bills that haunt consumers like the ghost of Christmas past.

There is still time to manage your Christmas debt...and all debt, in order to minimize holiday and post-holiday worries.

Part of the problem, according to experts, is that the nation's ethic has changed. Our parents viewed debt as a shame and accumulating a nest egg as the right thing to do. The young see that as "old school" and have been convinced that going into debt is fine.

Industry of Debt

The result is that while 40 per cent of credit card users pay their bills in full each month, the remaining 60 per cent roll them over — and over and over. The average balance of these "revolvers" is more than at more than $16,000 per family.

The debt industry — and it is an industry — has persuaded people that their "wants" are "needs" and that if you really care for someone, you'll spend more money on them. They tell you it's so easy, just use plastic. Live richly! What's in your wallet?

But they don't tell you how it will hurt, in mounting debt and higher interest rates and higher fees.

You can figure out just how much your Christmas debt is costing you to carry by using calculators on the Internet. Plug in $1,000 at 17 percent (the prevailing credit card rate) and you'll find that your interest totals $94 over one year and $187 over two.

Among the solutions: Take a look at whether you are giving a free loan to the government (i.e., you receive a tax refund). By definition, you are giving an interest-free loan to the government. Adjust your W-4 at work and put that in your pocket — an average of $260 per family — for purchases or for paying down your debt. There are other answers...solutions given at no costs.

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