| November 27, 2015

Research of the Week: Black Friday Buyer’s Remorse

What to do if you spend too much money today.

Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…

The interesting study

Happy Black Friday!

If you didn’t know by all of the ads on TV and online today is the biggest shopping day of the year. According to Statistic Brain, approximately 133.7 million shoppers will make purchases today to take advantage of all those amazing advertised deals. We’re taking a look at those statistics and how Black Friday savings can be offset by credit card debt.

The big result

Last year Black Friday shoppers spent an average of $380.95 in a single day of madcap purchasing, spending a total for $50.9 billion in stores and another $1.5 billion online.

The fascinating details

There are some interesting stats hidden in the Statistics Brain report:

  • As high as $381 may sound, it’s actually lower than the amount spent in 2013, where consumers spent $407.23 on Black Friday.
  • Just about one in four shoppers do the ritual of going out Thanksgiving night to camp out ahead of Black Friday early riser deals.
  • If you look at the total spending nationwide, about 3% of Black Friday purchases are made online… making one question the need for Cyber Monday.
  • Those who shop online spent an average of $159.55 last year; oddly Fundivo reports shoppers only spent $124.41, on average, on Cyber Monday last year.

What you can do

We did the math for our Black Friday Infographic and found shoppers spend about 1/3 to 1/2 of their total holiday budget during Thanksgiving weekend. That totals up to over $400 of discretionary spending over about four days.

If that amount makes you cringe, you’re not alone.

“The holidays place an incredible burden on families trying to make ends meet,” says April Lewis-Parks, Director of Community and Public Relations for Consolidated Credit. “Even a balance budget can be thrown off by so much added expense all at once.”

With that in mind, Consolidated Credit encourages you to be smart about Black Friday shopping this year – especially if any of your transactions are going on a credit card. You can use the seven secrets provided in the infographic linked above to save money as you shop, but then you also need to take time to total up your charges to ensure you have a plan to eliminate any debt you accrued.

If you don’t eliminate the debt quickly, the below example shows you what can happen to your holiday purchases on a minimum payment schedule:

  • Let’s say you spend $400 over Black Friday and the rest of Thanksgiving weekend.
  • You charge all of that on a credit card with an average interest rate of 15% APR.
  • The minimum payment schedule on the card is set at 2.5% of the balance.

Making only the minimum payments, it would take 33 months to pay off this debt and you would add $89.61 in interest charges. So you increase the cost of your Thanksgiving weekend spending by almost 20% before the debt is actually paid off.

With that in mind, check your credit card balances at the end of Thanksgiving weekend to see where you stand. Use a credit card debt calculator to make a plan for how to pay the debt off quickly. If you can’t pay it off in a few months, consider debt consolidation or call a credit counselor to look into options for debt relief. We’re here to help. Call to speak to a certified credit counselor for free today.

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