Spending Now Is Fun; Dealing With Debt Later, Not So Much - Los Angeles News | FOX 11 LA KTTV

The Willis Report

Spending Now Is Fun; Dealing With Debt Later, Not So Much

Posted: Updated:

It's the most wonderful time of the year! Ah, the holidays. For those of us who like to shop, it doesn't get any better than this. Massive discounts. Price matching. Shopping apps. This year in particular, retailers are going to all kinds of lengths to get your attention. Some are opening on Thanksgiving, others are starting their Black Friday offers a week in advance. But consumers' zeal for the deal sometimes gives way to getting all your shopping chores crossed off your list at any price. And, that can leave you with a holiday shopping hangover come January when you get your credit card bill at the end of the month.

The truth is December is the single, most active month on the calendar for credit card usage.  On average, we load our cards with $131 billion in December, that's 16.4 percent more than the average month. During November and December of last year, consumers spent more than $246 billion on their bank credit cards, according to TransUnion, the credit monitoring company. With $847 billion dollars ALREADY on our charge cards this year, according to the Federal Reserve, we could be facing a particularly debt-heavy Christmas season.

Holiday debt is bad enough but when you consider that the average interest rate on a balance transfer card is 15.8 percent, well, you can begin to see just how dangerous this debt can be. In other words, your debt is going to grow like topsy until you pay it off.  Let's say you charge the average amount of money that middle income homes are expected to spend this holiday season, or  $1,035.00, according to a Gallup survey. If you make minimum monthly payments on that debt of interest plus 1 percent of your balance (or $23.29 to start), it will take you nine years to pay off. Worse,  you will have paid a total of $773 in interest alone—nearly the amount that you borrowed. You're probably too smart to pay only credit card minimums, but even so it makes sense to analyze how long it will take you to pay off your holiday debt. Let's face it, nothing is worse than postponing your summer vacation because you are still paying off holiday debt. A good place to go to analyze your credit card debt is bankrate.com, where there are loads of calculators to help you determine the best way to reduce your debt.

Other ways to save this holiday season: Don't succumb to the offers by department stores for discounts if you open a new charge card. That's because while you bank the one-time discount, you'll also be likely to spend more. Plus, department store charge cards typically carry higher interest rates. For that reason, I like to shop in the virtual world with a list in hand. I find it more difficult to overspend when I'm not in the mall fingering the merchandise. Plus, having a list can keep you focused on what you really need to buy. For the adults in my family, each of us buys a single, funny gift and we play a game in which they are traded and exchanged. It's fun and nobody spends too much. I typically pay with a credit card with a rich rewards program and pay it off as fast as I can.  That means no holiday hangovers and no spending regrets.

  • Political NewsMore>>

  • Former Virginia Gov. Bob McDonnell's corruption case goes to jury

    Former Virginia Gov. Bob McDonnell's corruption case goes to jury

    Tuesday, September 2 2014 6:02 PM EDT2014-09-02 22:02:25 GMT
    The corruption case that could send former Virginia Gov. Bob McDonnell and his wife to federal prison was in the hands Tuesday of jurors who must decide whether the couple sold the influence of the office to a wealthy vitamin executive seeking legitimacy for his company's signature product.
    The corruption case that could send former Virginia Gov. Bob McDonnell and his wife to federal prison was in the hands Tuesday of jurors who must decide whether the couple sold the influence of the office to a wealthy vitamin executive seeking legitimacy for his company's signature product.
  • Ex-Va. Gov says he knows in heart he's innocent

    Ex-Va. Gov says he knows in heart he's innocent

    Friday, August 22 2014 6:33 PM EDT2014-08-22 22:33:08 GMT
    Former Virginia Gov. Bob McDonnell says he knows in his heart he's innocent of the federal corruption charges he's facing.
    Former Virginia Gov. Bob McDonnell says he knows in his heart he's innocent of the federal corruption charges he's facing.
  • Rolex passed among jurors in ex-Va. gov trial

    Rolex passed among jurors in ex-Va. gov trial

    Thursday, July 31 2014 7:08 PM EDT2014-07-31 23:08:18 GMT
    The requests for lavish gifts were frequent. Jonnie Williams — the star witness in a corruption trial against the former Virginia governor and his wife — was being asked for everything from a joy ride in his Ferrari to stock in the company he led.
    The requests for lavish gifts were frequent. Jonnie Williams — the star witness in a corruption trial against the former Virginia governor and his wife — was being asked for everything from a joy ride in his Ferrari to stock in the company he led.
  • PoliticsMore>>

  • Mideast Complexities Confound US Coalition Effort

    Mideast Complexities Confound US Coalition Effort

    Monday, September 15 2014 10:23 AM EDT2014-09-15 14:23:05 GMT
    The Middle East has confounded outsiders for years, so it is no surprise that another U.S.-led project with a straightforward goal - destroying a marauding organization of extremists - is bumping up against age-old rivalries and a nod-and-a-wink-style political culture.
    The Middle East has confounded outsiders for years, so it is no surprise that another U.S.-led project with a straightforward goal - destroying a marauding organization of extremists - is bumping up against age-old rivalries and a nod-and-a-wink-style political culture.
  • Can President Obama Wage War Without Consent Of Congress?

    Can President Obama Wage War Without Consent Of Congress?

    Friday, September 12 2014 10:38 AM EDT2014-09-12 14:38:11 GMT
    As a U.S. senator from Illinois running for the White House in 2007, Barack Obama sponsored a resolution to prohibit President George W. Bush's administration from taking military action against Iran unless it was explicitly authorized by Congress.
    As a U.S. senator from Illinois running for the White House in 2007, Barack Obama sponsored a resolution to prohibit President George W. Bush's administration from taking military action against Iran unless it was explicitly authorized by Congress.
  • 9/11 Commemoration, Observances

    9/11 Commemoration, Observances

    Thursday, September 11 2014 11:20 PM EDT2014-09-12 03:20:28 GMT

    With the solemn toll of a bell and a moment of silence, the nation paused Thursday to mark the 13th anniversary of the Sept. 11 attacks at the hallowed site just hours after President Barack Obama promised to root out and destroy a new group of terrorists threatening the U.S.

    With the solemn toll of a bell and a moment of silence, the nation paused Thursday to mark the 13th anniversary of the Sept. 11 attacks at the hallowed site just hours after President Barack Obama promised to root out and destroy a new group of terrorists threatening the U.S.

Powered by WorldNow

KTTV FOX 11
1999 S. Bundy Dr.
Los Angeles CA 90025

Main: (310) 584-2000
News Tips? (310) 584-2025

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices