HARRISBURG, Dauphin County—It's a problem some consumers face around the holidays: overspending and starting the new year in debt.
“When you get out amongst this cornucopia of merchandise with children saying I want this, I want this, I want this, I’m sure that it’s difficult,” said David Welber, a certified financial planner in York.
National Retail Federation found Americans spent more than expected the weekend of Black Friday. This year, America's Research Group projects 22.5 percent of consumers will use credit cards for their holiday shopping, even as some continue to pay off debt from last year.
The NRF projects Americans will spend about $586 billion this holiday season, an uptick of about 4.1 percent over last year.
ClearPoint Credit Counseling Solutions, a non-profit group that advises people on debt management and other issues, offers sevearl steps for tackling their debt.
Counselors encourage people to start by stopping charging. Then, transfer balances to a card with the lowest interest rate. This will give people a chance to pay off the debt on the highest rate card and then move onto the next one.
“If you can trasnsfer high-interest credit card debt into no-interest credit card debt, then you can pay it off a lot more quickly. But make sure you do pay it off because what happens if you don’t pay if off by the end of the introductory period, the interest rates really spike. And then, you can find yourself in just as bad a situation as before,” said Welber.
CCCS encourages people to assess their total debt by using a debt repayment calculator, such as this one provided by the Federal Reserve.
Many large retailers, such as Kmart, have also brought back layaway in recent years, offering an alterantive to charging too much and damaging your credit score.
Experts say start planning next year's shopping as soon as January by opening a savings account and stashing away cash month by month.