Holiday shopping can be a fun but also a stressful topic. A new Student Loan Hero survey detailed the nation’s spending habits during the holiday season — and it shows we put ourselves in debt buying gifts.
“If you’re not paying attention to your budget, you could end up going in a lot of debt this Christmas,” said Jennifer Landon, a financial advisor with Journey Financial Services, Inc.
Nearly half of respondents expect to spend more this year than they did last year.
“Thanksgiving’s next week with Black Friday right behind it, and it’s important this time of year to make sure that you’re conscious of what your financial plan is for the holiday season,” Landon said.
The main point of this survey is the loans. Fifty-six percent of respondents plan to use a credit card for holiday expenses, and 14 percent will spend more than $1,000 on their credit cards this year. But 37 percent of them said they don’t plan on paying their credit card off right away.
“It’s important to make sure that if you do end up putting purchases on credit cards, that you also have a plan to pay them off. Sixty-five percent of the people who end up using their credit cards during the Christmas season didn’t plan on using their credit cards. So now we have to make a plan to get you out of debt and then also to avoid the debt the next season, because you don’t want to end up in this cycle,” Landon said.
Forty-one percent rated their holiday shopping stress level as a level seven or higher. What to buy is one issue, but how much you might spend is a factor as well. However, if you plan ahead, have a full budget, have set prices for each person and scope out the best holiday deals, your credit card debt may be significantly lower.
“Every single time you check out of any store in town they’re going to ask you if you would like to save 20 percent, 30 percent and sign up for their credit card. Don’t do it. That’s a really quick way to end up with unplanned debt over the holiday season. It’s also important to remember that every time you sign up for one of those cards, it’s going to be a hard hit on your credit and it could end up affecting your credit score which could also be very costly over time,” Landon said.
If you are using credit cards this holiday season, you can use Credit Card Insider’s definite resource guide to building credit with credit cards to stay smart while shopping.