Holiday Deal Debt Traps

: Chris Lee Law Firm

  Filed under: Debt

debt trapsBy this time of the year most of us have already begun feeling the pressure holiday shopping brings. There aren’t too many families who can afford to splurge this holiday season, but even those who can tend to overspend like the rest of us. With so many retailers offering supposedly great deals, many of us have already added another 10-20 percent to our credit card bills in the last month alone.

Falling Into The Trap

A new technique used by many retailers this holiday season is the splurge-to-save deal, which basically promises to save you 25 to 50 percent on purchases over a certain amount. For example, you may be able to save 25% on purchases if you spend over $200. The problem is that very few of us go into a store with the intention of spending a certain amount. Most of us have an idea of what we are looking for and set out to buy it, and it only. However, people become quickly enticed by “savings” or “buy one, get one” deals and easily overspend.

It is estimated that nearly 10% of consumers have not paid off their balances from last year’s holiday shopping spree. With the average consumer carrying more than $7,000 in credit card debt, these figures quickly accelerate with each passing holiday season.

Steering Clear

Don’t get sucked into the retail tricks! Remember, they are out to make money and nothing less. Make of list of the gifts you need and do not deviate from your list. Purchase as many of your gifts in cash or directly out of your bank accounts with a debit card, and avoid credit purchases at all costs. Research shows that consumers spend 12-18 percent less when they use cash over credit. It seems the old saying is true, “cash is king”.

 


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