- Office of Consumer Affairs and Business Regulation
Holiday-induced debt can be a problem for many Americans looking for the newest cell phone, electronic device, or the hottest new kid’s toy. Many companies plan major product releases during this shopping season and are unyielding with their advertising.
According to new data from NerdWallet’s 2018 Consumer Holiday Shopping Report, which analyzed spending and behavior trends of over 2,000 Americans aged 18 and over, Americans plan to spend an average of $776 during the holidays. That’s over a $100 more than the average spending last year! Also of note, the survey found that over 39 million Americans are still paying off credit card balances amassed over the 2017 holiday season.
Holiday gifting and charitable giving are common (and appreciated) this time of year. But remember, debt is a heavy burden to carry for anyone which is why experts suggest that in order to curb spending and keep from falling into the red this year, consumers follow these tips:
- Make a budget and stick to it. Decide how much you can afford to spend on everything – gifts, decorations, donations, packaging, and more. Once you figure this out, divide it by the number of people you plan to buy gifts for and estimate.
- Monitor sales. Compare prices early to get those discounts.
- Consider alternatives to buying gifts for everyone. Many people participate in gift exchanges, in which each person buys a gift for one other person in the group. Set a top price for each gift so everyone pays the same amount.
- Do not reach into your emergency funds, retirement savings or regular savings to cover holiday costs.
- Pay debt back as soon as you can.
- Be cautious if considering payday loans to help finance your spending this month. A payday loan is a short-term, high-interest loan, generally for an amount of less than $500, typically owed within 14 days of receipt. Compounding fees and interest over an extended period of time can lead to some payday loan debtors having to take out additional payday loans to pay off their outstanding debts in an attempt to just stave off more rollover fees.
- If you are in debt, know that you have rights. Debt collectors attempting to collect debt from Massachusetts residents must be licensed by the Division of Banks and must follow certain rules. Learn more about the Do’s and Don’ts of Debt Collection.
