LOUISVILLE, Ky. (WAVE) – As we prepare to revel in the warmth and beauty of spring, a new survey has found that many Americans are caught up in worry and regret over lingering holiday debt. of 2021.
According to an early 2022 survey by personal finance tech company MoneyGeek, 40% of Americans still haven’t paid off their 2021 holiday debt.
If there’s trouble paying the vacation bills, remember to “ho-ho-hold” next time before swiping that credit card. If it’s too late for that, it’s time to pay as soon as possible.
“On average, Americans spent $1,131 while on vacation, and they put most of that spending on a credit card,” MoneyGeek’s Doug Milnes said.
More than a quarter of Americans surveyed regret their level of spending. Shoppers between the ages of 25 and 44 expressed the most regret about their vacation spending, and more women than men regretted their spending.
“Forty percent of all respondents to our recent survey placed more than 90% of their vacation spending on their credit cards,” exclaimed Milnes.
Shoppers may say the reason for having a credit card is for all the things they can’t afford, but they might want to reconsider.
Use a credit card with care. A credit card purchase is a loan to yourself. The loan must be repaid quickly or the interest due for this loan will begin to accumulate.
“For some people, that vacation debt will never go away,” Milnes explained. “It’s going to be part of their credit card balance that they’re trying to pay off. They will continue to incur costs on this.
Credit card owners are charged more money for the remaining balance on a credit card.
A fee will be added to the balance, and if not fully paid off the following month, buyers will end up paying interest on that balance. It just adds up.
“This is a compound interest payment, so it’s really in your best interest to pay off those credit card balances as quickly as possible,” Milnes pointed out.
Before someone “bottoms up” the December giveaway spirit, there are things shoppers can do.
Using a credit card isn’t the problem, however, not paying for the card each month is where the problems start to arise.
Do not charge more than can be reimbursed in any given month. Interest charges can be avoided while establishing a credit score will allow shoppers to enjoy the benefits of using a credit card.
“You can figure out what you spent on the holidays this year and then make a plan to save money elsewhere,” Milnes explained.
Old-fashioned Christmas Club accounts are still extremely popular with credit unions and small banks. People can also open a savings account at a bank of their choice and have an amount transferred to that savings account on special occasions like Christmas.
“What you do every month is you make a deposit into that club account, and you can’t withdraw from the account until the end of the year,” Milnes suggested.
While spring cleaning, make it on the to-do list to pay off holiday credit card debt. Take some time to learn about credit cards and debt from these MoneyGeek sources:
“You need to come up with a plan to pay off that credit card debt as quickly as possible,” Milnes said.
If someone needs help paying off debt and building their credit rating, Doug Milnes suggests contacting the National Credit Counseling Foundation and International financial management. Both nonprofits have a long history and excellent track record of helping those struggling to make ends meet.
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