The holiday shopping season is upon us. Today is Cyber Monday, and people were out in full force on Black Friday. The temptation to have a credit card Christmas is definately there. However, in this economy it is best to be prepared, and part of being prepared is to reduce your debt — especially your credit card debt.
Consider a cash Christmas instead.
Yes, I know the government is trying to push increased consumerism upon us. In fact, the latest incarnation of the TARP program is all about encouraging increased consumer debt. Credit card rates are falling (everywhere but Citi). And people have been saying that it’s “patriotic” to spend money in order to help our country overcome this economy.
Don’t buy it. Literally.
While going on a debt-fueled spending spree may be “good” for the economy, it certainly is not good for your individual personal finance situation. The interest charges, the increased debt load and the stress that comes with it is not healthy in a number of ways. Instead, consider using cash. Even with online shopping, you can use third-party payment options like PayPal, Google Check-Out, Amazon’s Pay Now, Pay with Cash and others. You may not be able to buy as many presents or as expensive presents, but in an economy like this, your family and true friends should understand.
Are you considering a cash Christmas?
December 2, 2008 at 2:20 am
I can’t agree more than to resist the temptation of credit cards. I wish I was wiser earlier. Unfortunately, I’m trying to get myself out of the debt (by trying to earn some extra income as posted on my site).
If you DO have credit card debt and are trying to reduce it, you can contact your credit card company and let them know you found more competitive interest rates and ask them to lower your rate. Note that this only works if you have a good history of ontime payments and have been their customer for over a year. I learned this tip from one of the books I read.
December 2, 2008 at 2:53 am
That’s very true. So many of us make these mistakes starting out. I sure did! And you are right about lowering your rate. It works in many cases. Unfortunately, right now the technique isn’t working as well because it’s harder to get approved for a new card with a lower rate.
December 3, 2008 at 5:30 pm
“While going on a debt-fueled spending spree may be “good” for the economy, it certainly is not good for your individual personal finance situation”
I’d say it’s not especially good for the economy either. It might prop it up in the short term, but as long as it’s being funded with more debt we’re just setting ourselves up for more of the same problems down the road, only magnified.
People just have to suck it up and quit spending money they don’t have. Unfortunately, we’ve been overspending for so long now that it’s become second nature.
December 3, 2008 at 6:12 pm
Don’t overspend on your credit cards – credit card debt is out of control – don’t let it take any further control of your life. In fact, give yourself a Christmas Debt Gift and Make it a regular practice to call your credit cards to ask for a lower rate. I have one client who owes over $20,000 on a Visa that was at 18%. He spoke with a ‘rate specialist’, touting his rising credit score and declining balance and got his rate cut in half, from 18% to 9%! His monthly interest charge was instantly reduced by $150, which will help him pay off his debt even sooner.
December 4, 2008 at 7:28 pm
Thanks for weighing in William and CFP! I agree that short term fixes for the economy — like continued spending — won’t work long term. At some point things really will reach a true tipping point, and there won’t be anything we can do about it.
I like the idea of a debt gift. Anything that you can do to help you pay off your debt faster is a good thing.
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