Christmas has come and gone and while most Americans have taken down the tree and cleaned up the mess, they've yet to evaluate the financial wreckage of another financed holiday season.
Reportedly shoppers in the U.S. racked up an average of $1,054 of debt over the 2020 Christmas season — an increase of 5% over last year. In fact, 44% of shoppers racked up more than $1,000 in holiday debt, while 5% accumulated more than $5,000 in debt. Go, Santa!
Bouncing back from those purchases won’t come as easy (for most people) as buying the gifts did, and paying off the doubt will outlast the holiday cheer by far...without a payoff plan, that is.
Based on a consumer survey, only half of those holiday spenders plan to repay the debt within 3 months — others (29%) said they need more than five months to pay it off - leading to interest on the credit card debt and growing balances. Like hamsters on a wheel, they'll keep throwing money at the credit card debt while the compound interest eats up their minimum payment. Sadly, 10% of people who took on holiday debt said they would only be able to make minimum payments on credit cards. Happy New Year!
Let this sink in. If you charged $1,054 to fund your family holiday and you paid a minimum payment of $25 each month, you would be paying on the balance until 2023...IF you never charged another dime, that is. With an average interest rate of 15.9%, fees on that debt could easily add up to $500. In 2020, Americans hit the highest recorded credit card debt in U.S. history, at $1.7 trillion in outstanding revolving credit.
It's not all doomsday - there is hope. As surely as you made a Christmas list and checked it twice...as surely as you planned your holiday meal...as surely as you had a plan to decorate and entertain, you need a PLAN to manage your debt. Getting rid of your debt quickly can be just as painless (and even more satisfying) than racking it up in the first place when you have a financial GPS to direct you!
It's not a bad thing to have debt and it's not necessarily a bad thing to finance your Christmas! The "bad thing" is when you don't understand compound interest and how it can eat you alive, and you don't have a firm plan to pay it off before the next holiday rolls around.
If you like the idea of having a GPS that can direct you to hassle-free debt-free, CLICK HERE and be sure to leave your info so that you can receive info on the best solution for you.
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We're buying back America, one family at a time; beginning with you and your holiday bills and including your mortgage, car payment, student loans, or any other debt you have that you wish you didn't.
Just think, one day soon you can have ALL your debt behind you and never have to finance Christmas again.