Holiday Debt Hangover
Holiday debt, the gift that keeps on taking.
According to a survey done by Consumer Reports, this year among those using credit cards to pay for holiday gifts, the average bill will be $626, though 17 percent of shoppers plan on racking up $1,000 or more in holiday charges.
Some 59 percent say they will retire holiday credit card debt by the end of January while 23 percent won’t pay off those bills until March or later.
Financial experts call it the holiday-debt hangover.
Now that Christmas Day is done, in many cases those who paid with plastic will be left watching the bills — and interest–pile up.
Credit cards are hazardous to holiday spending. The average American household carries $9,000 in credit card debt throughout the year and then holiday debt gets piled on top of that, Consumer Reports said.
Americans were predicted to put $63.6 billion on credit cards this holiday season, Consumer Reports said.
People say they will pay off their holiday bills by March, but often that does not happen. They fall victim to their best intentions, the editor said. As a result of holiday debt that creeps into the new year, credit card companies will be raking in $4.6 billion from people who do not pay off their balance in January, she said. In addition to the mounting interest, credit card bills are financially dangerous because late payments can turn into bad credit. If you are one day late on one card and all the credit card companies find out and interest rates can go up across the board, in some cases up to 25 percent, she said.
Our New Year’s Resolution: Have christmas paid off by Feb 1.