For many people, the holiday season is a great time to interact with friends and family. However, there are also many people who struggle to pay for all of their bills during the holiday season. There are millions of people who are still paying down their debt from last year during this time.
According to a recent report, the average household spends several thousand dollars during the holidays on things like additional food and gifts for others. Although consumer spending is a good thing for the overall economy, it is not a good thing if people are taking on a lot of debt to do so.
The most common way to pay for holiday expenses is to use a credit card. There are many people who simply do not have the cash on hand needed to pay for all of their holiday expenses. As a result, people simply use their credit cards because they are easy and convenient to use.
One problem with using a credit card is the interest rate. If consumers are not careful, they can buy too many things and end up with a lot of debt. When spending money with a credit card, it does not even feel like real money in a lot of cases. Credit card debt with a high rate of interest is difficult to pay down, especially if someone is living on a low income.
There are many retail companies that want to encourage holiday spending. Many retail companies rely on their sales during this time of year to become profitable. As a result, many companies offer massive discounts in order to drive consumer traffic to their business.
As a consumer, it is critical to have a financial plan during this time of the year. It can be really easy to get distracted by all of the deals being offered. You should have a financial plan for spending money on things like food and gifts. With a budget, it is easier to stay on a plan and avoid additional debt.