The Willis Report: Avoid holiday shopping hangovers with a list - KMSP-TV

The Willis Report: Avoid holiday shopping hangovers with a list

Posted: Updated:

By Gerri Willis
FOX Business Network

It's the most wonderful time of the year! Ah, the holidays. For those of us who like to shop, it doesn't get any better than this. Massive discounts. Price matching. Shopping apps.

This year in particular, retailers are going to all kinds of lengths to get your attention. Some are opening on Thanksgiving, others are starting their Black Friday offers a week in advance.

But consumers' zeal for the deal sometimes gives way to getting all your shopping chores crossed off your list at any price. That can leave you with a holiday shopping hangover come January, when you get your credit card bill at the end of the month.

The truth is December is the single, most active month on the calendar for credit card usage. On average, we load our cards with $131 billion in December, that's 16.4 percent more than the average month.

During November and December of last year, consumers spent more than $246 billion on their bank credit cards, according to TransUnion, the credit monitoring company. With $847 billion dollars ALREADY on our charge cards this year, according to the Federal Reserve, we could be facing a particularly debt-heavy Christmas season.

Holiday debt is bad enough but when you consider that the average interest rate on a balance transfer card is 15.8 percent, well, you can begin to see just how dangerous this debt can be.

In other words, your debt is going to grow like topsy until you pay it off. Let's say you charge the average amount of money that middle income homes are expected to spend this holiday season, or $1,035.00, according to a Gallup survey.

If you make minimum monthly payments on that debt of interest plus 1 percent of your balance (or $23.29 to start), it will take you nine years to pay off. Worse, you will have paid a total of $773 in interest alone-nearly the amount that you borrowed.

You're probably too smart to pay only credit card minimums, but even so it makes sense to analyze how long it will take you to pay off your holiday debt. Let's face it, nothing is worse than postponing your summer vacation because you are still paying off holiday debt.

A good place to go to analyze your credit card debt is bankrate.com, where there are loads of calculators to help you determine the best way to reduce your debt.

Other ways to save this holiday season: Don't succumb to the offers by department stores for discounts if you open a new charge card. That's because while you bank the one-time discount, you'll also be likely to spend more. Plus, department store charge cards typically carry higher interest rates.

For that reason, I like to shop in the virtual world with a list in hand.I find it more difficult to overspend when I'm not in the mall fingering the merchandise. Plus, having a list can keep you focused on what you really need to buy.

For the adults in my family, each of us buys a single, funny gift and we play a game in which they are traded and exchanged. It's fun and nobody spends too much. I typically pay with a credit card with a rich rewards program and pay it off as fast as I can.

That means no holiday hangovers and no spending regrets.

Interact with Gerri on Twitter @GerriWillisFBN and Facebook for more information, or to voice your concerns and questions.

  • BusinessMore>>

  • South Korea ferry disaster may cloud Obama visit

    South Korea ferry disaster may cloud Obama visit

    Friday, April 25 2014 1:16 AM EDT2014-04-25 05:16:47 GMT
    President Barack Obama is rejecting suggestions that an Asia-Pacific trade deal is in danger.
    President Barack Obama stepped into the familiar role of chief consoler Friday as he arrived for meetings in South Korea, a key U.S. ally that is reeling from a deadly ferry disaster.
  • US, Japan say Pacific trade talks make headway

    US, Japan say Pacific trade talks make headway

    Friday, April 25 2014 1:04 AM EDT2014-04-25 05:04:45 GMT
    Closing two days of around the clock negotiations, U.S. officials said Friday that they reached a breakthrough with Japan to move forward a stalled regional trade pact even though gaps remain that could still upend...
    Closing two days of around the clock negotiations, U.S. officials said Friday that they reached a breakthrough with Japan to move forward a stalled regional trade pact even though gaps remain that could still upend a final...
  • Study: US manufacturers gaining competitiveness

    Study: US manufacturers gaining competitiveness

    Friday, April 25 2014 12:15 AM EDT2014-04-25 04:15:38 GMT
    U.S. manufacturers have grown more competitive over the past decade compared with factories in China, Brazil and most of the world's other major economies.
    U.S. manufacturers have grown more competitive over the past decade compared with factories in China, Brazil and most of the world's other major economies.
Powered by WorldNow

KMSP-TV
11358 Viking Drive
Eden Prairie, MN 55344

Phone: (952) 944-9999
Fax: (952) 942-0455

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices