The tinsel is down, the stockings that hung by the chimney with care have been looted with equal determination, and most of us are dealing with the detritus left behind by a month’s worth of shopping, eating, and other excesses wrought by the season.
We can all take a deep breath, until the credit card bills arrive next month. A survey conducted several years ago revealed that most people “forget” how much they actually spent on Christmas gifts until after their credit card statements come in, leaving us a bit chagrined when it’s time to pay the piper.
Then there are the exorbitant interest rates we pay on our purchases if we don’t pay them off quickly — on average, for every $10,000 of credit card debt, a whopping $16,000 of interest is tacked on.
Although this year’s season is over, here are some strategies to help us get back on track now, or to at least to keep in mind when next December arrives (which will seem like only a month from now):
- Instead of adding to your credit card debt, trying paying with cash. The best case scenario is to buy gifts throughout the year with cold hard green so that the holiday season doesn’t leave us as breathless next year. In fact, money experts agree that the best way to stick to a budget is to pay with cash, even for groceries — those who do so end up paying 40% less than those who use a credit card.
- Instead of using a traditional credit card such as Visa or Mastercard, use an American Express card instead. American Express is a charge card used for convenience, not as a way to spend money we don’t actually have. The entire bill is due one month later.
- If you do use a credit card, make sure there will be enough money in the back so that you can pay the majority of it off quickly.
- Don’t forget sales tax. When people use a credit card, they tend to forget about sales tax, which in some locations is nearly 10% of the purchase cost of an item.