"Consumers in a frugal holiday mood", the Conference Board reports. They are saying U.S. Household Plan to spend an average $390 this season. There is no denying frugality in my family. Our holiday goal this year: NO use of CREDIT CARDS. It's usual that we will spend an average of $700 ,on our credit cards, for the shopping season; this is in addition to our cash expenditures (about a $1,200 holiday season average).
Not bad, right? Think again. This is $700 unplanned expenses. Multiply the credit card's interest rate (say 11% in this case) at $35 minimum payment amount per month and it will take 22 months to pay the balance in full. Plus, $80 goes to the bank in interest alone.
Not only that, there are 2 more holiday shopping seasons to endure during this pay off time. If the cycle is repeated for two more seasons, that is almost 6 years to pay off, $240 interest to the bank, and a hefty debt balance of $2,100.
Think twice before you swipe that card, take on the holiday stress, and pay the credit card company to help you stay in debt.
The best gift money can buy: The Total Money Makeover: A Proven Plan for Financial Fitness
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