Posted on 12/10/2003 5:38:24 AM PST by JesseHousman
This is the season to spend, spend, spend.
But if consumers aren’t careful with their credit cards, they’ll need all of 2004 to pay for toys that will be broken the week after Christmas, warn credit counselors and collection agencies.
"Using credit cards has become such a way of life that people don’t question it anymore," said Nathan Thompson, a spokesman for ACA International, the Minneapolis-based association that represents third-party collection agencies. "It’s just another cost of living."
But that kind of thinking can be dangerous because the average U.S. household has almost $9,000 in credit card debt, according to industry tracker CardWeb.com.
At today’s interest rates, that means the average household pays $1,200 in finance charges each year. Compare that with the $672 average the National Retail Federation reports each holiday shopper will spend this year, and it’s easy to see why so many people are financially out of whack, said Mr. Thompson.
"The numbers are shocking," he said.
Build finance charges into the budgeted amount for holiday spending, which will reduce the amount left to shop with but will help a shopper follow a set plan, ACA suggested.
Evidence abounds of Americans’ heavy reliance on credit.
Kay Lodzinski, manning the Erie Street Market booth of Curb’s Candle Co. yesterday, estimated that three-quarters of shoppers in recent days have been using credit cards for transactions from $12 and $100.
The holidays are a danger zone for consumers who have trouble controlling finances, said Steve Rhode, president of Myvesta.org, a nonprofit consumer education organization in Maryland.
"The holidays are the No. 1 time people spend money," he said. "Consumers this year have been using home equity to pay down debt, but if they use credit cards during the holidays, the debt will go right back up."
A survey conducted by his group found the average amount of credit card debt carried by individuals had dropped by 29 percent, but that the average of its clients rose to $77,000 this year from $52,210 in 2002.
Such reliance on credit does not surprise Connie Yager,a pharmacist who handles cash register transactions.
"Customers will give me a card that’s rejected and they’ll just pull out another one until they find one with a balance. They’re so nonchalant about it."
Ms. Yager and Jean Lovejoy, dining together yesterday at the Erie Street Market, said they know the lure of credit, especially at the holidays, because they’re so easy to carry. Both admit they have general price ranges for everyone on their list, but are more apt to buy something when it’s the right thing for the right person, regardless of the cost.
"I buy something if I know it’s perfect," said Ms. Lovejoy.
But, the two women said, they’re religious about paying off the cards each month.
Such discipline is tough to come by, said Myvesta.org’s Mr. Rhode. Some people learn, others don’t, once they pay off credit balances, he said.
Gale Crenshaw, executive director of Community Credit Counseling Specialists in Toledo, said some of his agency’s biggest numbers come in February, March, and April, when the reality of Christmas spending has hit.
"A lot of people simply run out of money before the end of the month ... but they keep trying to get through the season because they don’t want to disappoint people," he said.
How ironic that the nation and business depend upon people spending themselves into poverty to celebrate a holiday that is being trampled into obscurity by an insane politically-correct gaggle of morons.
Darn straight. I have one of those 1% rebate credit cards, so every purchase for me is 99 cents on the dollar. I carry $0.00 balance every month.
That is absolutely amazing! Happy to be debt free!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.