Consumer Payment Card News

Credit Card Hangover?

Photographs are a great way to remember the holiday season. Credit card bills are not.
Americans will spend on average more than $1,000 per family on holiday purchases this year, leaving a pile of debt that will remain long after the tree trimmings are packed away. In fact, many Americans are still paying off debt from last year’s holiday spending.

It’s not too late to avoid shopping hangover this year. The Ohio Credit Union League offers these tips to prevent the post-holiday blues:

Cash or Charge?

If your monthly debt totals more than 20 percent of your gross income (not counting house or rent payments), use cash or checks, not credit cards.

Lower Interest Payments

Shop around for credit cards with the lowest interest rate. The Consumer Federation of America finds that rates on cards from not-for-profit credit unions are, on average, about three percentage points lower than for-profit bank cards.

Pay Now, Save Later

If you carry over credit card balances after the holidays, don’t be tempted to make only the minimum monthly payment. Calculate how much it will take to pay off your bills by the end of March. Even if this causes you to decrease your savings in the short run, you’ll rebuild your savings more quickly.

Set Money Aside

In January, open a Christmas Club account (or some type of separate account) at your local credit union. Divide your holiday spending by 12 (or by the number of paychecks you expect to receive next year), and have that amount automatically deducted from your paycheck. When it’s time to shop again for the holidays, you’ll have all the money you need — plus interest.

For more information visit The Ohio Credit Union League at http://www.ohiocul.org

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