Credit Card Debt Dampens Enthusiasm For Shopping
The holidays are supposed to be a joyful time, but for many, that joy is dimmed by concerns about money. Credit card debt, in particular, can cast a shadow over holiday cheer, according to a survey by one of the United States’ leading mortgage servicer.
Jay Bray, chair and CEO of Nationstar Mortgage Holdings, says the debt crisis is hitting consumers hard this holiday season. “We are seeing the stress of debt take its toll on Americans,” said Bray.
The survey, which included responses from over 1100 adults across the US, found that 46 percent of those surveyed are currently in credit card debt, and 33 percent would rather skip the holiday season altogether than spend money on gifts.
Budgeting and transferring balances
One way to keep spending under control is to decide on a budget and stay within it. But 52 percent of survey respondents said they didn’t plan to make a budget, or if they did, doubted they’d be able to stay within it.
Thirty-two percent of those surveyed planned to pay for their holiday purchases via credit card, which could result in a stressful January, when minimum payments are due on those purchases. Twenty-one percent of people who went into credit card debt last holiday season said they took at least six months to pay it off.
One way to pay credit card debt off quickly is to transfer your balance to a new credit card that offers a zero percent annual percentage rate on balance transfers for a period of time. If your credit card has a high APR, it will take longer to pay off the balance, so transferring it to an interest-free card is a smart move.
Many balance transfer credit cards give folks a year or even longer to pay off their debt, provided they make all payments on time and stay within the terms of their customer agreement. One thing to keep in mind is that many credit issuers charge a minimal fee to transfer a balance. Three percent of the balance transferred is typical. Depending on the interest rate of your old card, this fee is often well worth paying.
Keeping spending under control and using balance transfers to pay off credit card debt are good ways to stay merry this holiday season, without skipping the fun of unwrapping gifts.