Black Friday is almost here, followed closely by Cyber Monday, both of which bring sales that are hard to resist. Consumers who are going to advantage of these sales need to be aware that they could face a Red Tuesday(TM) if they charge holiday purchases to credit cards without a plan in place to pay them off in a timely manner.
Holiday shoppers are expected to spend an average of $749.51 on holiday related expenses for 2012 according to the National Retail Federation. Charging that amount on a credit card with an interest rate of 18 percent and making only a five percent minimum payment each month would take over five years to repay. Add $275 in interest charges during that time and consumers will find that their 2012 holiday expenses will actually cost them close to $1,025.
Red Tuesday(TM) is a real possibility for consumers who do not take the time to plan.
In order to avoid a Red Tuesday(TM) in 2012, AICCCA offers the following tips for Black Friday and Cyber Monday spending:
- Write it down. Look over the ads and make a list before you shop, whether online or in person. A complete list makes it easier to walk away from impulse buys.
- Pay with cash. For Black Friday shopping, determine the amount of money you have on hand to spend and take only that amount of cash with you when you shop. Be sure to leave your credit cards at home so that when you run out of cash, you will have to stop.
- Do your homework. For Cyber Monday shopping, search for free shipping and coupons. Be sure to shop only at sites you trust. Credit cards are actually a safer option for online shopping. To avoid incurring interest charges and adding to your debt load, charge only the amount you can pay in full as soon as the bill arrives. If you go over that amount, try to charge no more than what you can pay off in 90 days or less.
If your Tuesday is Red, contact an AICCCA member at 866-703-8787 or visit www.aiccca.org.
