Every year, we try to help families control their spending and taking on unnecessary debt. After all, it is estimated that about 1/2 of all Americans go into debt during the holiday season. The most common reasons for taking on credit card debt comes from travel-related expenses, holiday entertainment, and of course, buying gifts.
Here are some of the biggest contributing factors that put Americans in debt during the holiday season.
- Putting it all on the credit card, without having a plan to pay it off. Remember, if you are already carrying a balance on your credit card, chances are that you aren’t able to pay off the entire balance after your holiday shopping is finished. This means that you’ll have a higher monthly payment with a high interest rate. You could end up carrying the additional credit card debt for a long period of time.
- Opening store credit cards to take advantage of certain promotions. Retailers offer their own credit cards with very appealing offers - gift cards, extra rebates on certain products, as well as many other incentives. Employees know that people are wary about opening new credit accounts, so they’ll tell you right away that you can pay it off at the end of the month and still receive all the benefits. It’s very likely that you’ll wind up making monthly payments on yet another credit card.
- Failing to budget or ignoring your budget. You’ve probably heard the quote, “failing to plan is planning to fail.” Likewise, failing to budget often leads to uncontrollable debt. Without a financial plan, you’re much more likely to overspend.
We understand that it is difficult to avoid overspending during the holiday season, but remember that you could be paying off that debt long after the holiday season ends. If you find yourself wondering what life after bankruptcy would be like without all the debt hanging over your head, call Castle Law Office at 816-842-6200 to speak with an attorney.