Credit card spending at Christmas

Special to Atmore News

Many people now avoid the crowds and do their Christmas shopping online. Experts predict that this Christmas season consumers will spend more money than ever buying gifts on the internet. Last season set new records of internet spending, and this year, more of the large retailers are targeting internet shoppers with bargains. This means that there will be more competition among these retailers, which will help bring down prices. This is good news for shoppers who use debit cards to make these discount purchases, but for those who use their credit cards to make these purchases, it may not be such a good deal.

Easy to overspend
The danger when using a credit card to make Christmas purchases is always the same.

“With credit, you almost always overspend,” said Rick Zapata, a regional agent in Family Resource Management & Workforce Development with the Alabama Cooperative Extension System. “The temptation is always the greatest when you find that special something for that special person on sale on the internet.”

Do the math before purchasing
If you sit down and do the math on your credit card purchase, the numbers just do not add up. You may not be saving any money. In fact, you will probably lose the savings when you pay a higher interest charge. For instance, the item you want is discounted 10 percent on the internet. If your credit card charges 29 percent interest, you automatically lose 19 percent of the value of the item. Now, would you knowingly pay 19 percent more for an item as a present for someone? If you have to pay shipping or sales tax for the purchase, it will add another cost that will reduce your savings. Just because something is on sale does not mean that you should buy it, especially if you have not paid off last year’s Christmas shopping on your credit cards.

Save on shipping
The only way that you can save on an internet purchase is if you use your debit card and get free shipping. There are some internet sites such as Walmart or Home Depot that ship to a local store for free. This is another way to save with the discount price on the item and free shipping.

The closer Christmas is, the lower the prices will be. Expect to get the discounts before Christmas this year. Look for these bargains the week of Christmas. With local store pick up, you may be able to save a bundle on some of your purchases.

Stick to a budget
The best way to shop for Christmas is to have a budget for your gifts and set a limit. Then, leave your credit cards at home and when you are out of the money that you budgeted, you are finished shopping.

Give gifts that don’t cost money
Also, consider giving gifts that don’t cost money. You can always recycle things that you do not use anymore. Another great idea is to send someone special a recorded personal Christmas message on CD or DVD. You could send them a history of your family or tell them things that you would want to pass on such as an ethical will. These are special and personal messages for your family and friends that they will treasure forever.

Donna Reynolds is with the Alabama Cooperative Extension System.