As the song says, 'it's the most wonderful time of the year.' Unfortunately for a lot of people, it's also the most stressful.
- Sixty-six percent of holiday shoppers said debt will last
- Forty-five percent already had debt before the holiday season
- Experts say best way to combat is to never reach for the credit card
Forty-five percent of Americans already have credit card debt going into the season. According to MagnifyMoney's recent Holiday Debt survey, last year, the average shopper not only added to that debt, but tacked on another $1,000 dollars during the holidays.
According to experts, those bills tend to go unpaid into the new year.
"Debt rarely gets paid off in January," said Nick Clements, co-founder of MagnifyMoney.
"About 66 percent said it will take them three months to pay off the debt," added Clements. "In my experience having worked in the credit card industry, it will likely take them quite a bit longer."
It will also likely cost them quite a bit more.
For instance, if you charge that thousand bucks on a credit card with a 16 percent interest rate and every month and pay only the minimum due, it could take as long as five years to pay off your debt -- plus it would cost you $2,000 for the original $1,000 spent.
"Not that using a card is always bad," said Clements. "It's a great way to earn free rewards or cash-back. But that only works if you pay off the balance in full every month. Otherwise, the math just doesn't add up."
So what's Clement's strategy for keeping your cash on a tight leash this holiday season? Place it into envelopes before you head to the store.
"Don't spend more than what's in the envelope," ended Clements. "You might find it ridiculous, but honestly it's the easiest way and study after study shows that when you have a limited amount of cash in your hand, you will spend dramatically less than if you just have to swipe and worry about it tomorrow."