How to Avoid the Holiday Debt Hangover

Christmas is less than two weeks away, and by now most of us have made our holiday shopping list. But before you buy, some budgeting steps now can help you avoid starting the new year with an ugly debt hangover.

With the economy a looming concern, retailers anticipate most consumers are approaching the holiday shopping season with some restraint. But a Consumer Reports poll found shoppers have some habits to break from last year. They found:


  • Actual spending in 2010 was 22 percent higher than intended spending.
  • 45 percent set a budget, but blew through it.
  • Six percent were still paying off last year’s holiday bills as of this October. That’s 14 million Americans.’s Beverly Harzog says to chart a spending course early and check periodically to make sure you’re still on track. “Decide what your number is, how much you’re going to spend on each person, and then stick to it.”

A discount bonus for opening a store credit card might seem like a good way to trim costs, but may cost you later. Harzog says, “In almost all cases that’s a bad idea. And the reason is because the interest rates on most of these cards are almost always very high.”

And know where you stand before you spend, by giving yourself the gift of a credit report.

(source: CNN)

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