Holidays
Credit Card Debt likely to Increase this Holiday Season, Despite Forecast of Lower Consumer Spending
By Lydia Verret
CardRatings.com Reporter
According to a poll conducted by
Consolidated Credit Counseling Services,
60% of the 588 respondents polled said they plan to spend less money this
holiday season than they spent last year. However, spending less does not necessarily translate
into decreased credit card debt. Some of the key results of the survey are as follows:
• 43% of respondents are still paying off last year’s debt.
• 30% were paying off the previous year’s debt at this time last year.
• 30% plan to spend $300 - $500 this holiday season.
• More than 21% plan to spend $500 - $1,000 this year.
• Almost 5% of the respondents will spend more than $1,000.
• 2% of men plan to do all their holiday shopping online, triple the percentage
of women planning to do the same.
April Lewis-Parks, Community Relations Director
for Consolidated noted, “People are spending less for
the 2005 holidays because of increased fuel prices, the waning economy, and job
layoffs. Tough economic conditions this year did not enable consumers to pay their
existing debts in a timely manner. Even so, there will be those people who could be headed for a debt trap. Many Americans lack a clear picture of their income
and expenses and it can lead consumers to not know how much they should spend.
Consider that a $3,000 credit card debt with an annual interest rate of 16.9% means
the cardholder pays $507 a year for interest alone. Many people are still
paying off their credit cards from last Christmas. Only 35 percent of American credit
card holders pay off their balances in full each month.”
So, clearly all the news is not good for consumers this holiday season. If you do have holiday debt that you're unable to pay off when your January statement arrives, then consider applying for a lower rate credit card. You can comparison shop for the best low rate credit cards using the Card Reports section of CardRatings.com. If your credit score is in the 720 range, then you should be able qualify for a credit card with an interest rate in the 10% range.
