People could carry credit card debt into the new year as pandemic strains finances
In an already financially tricky year, some Americans could carry credit card debt into the new year. Experts say more and more Americans are using credit cards to put gifts under the tree.
Our collective credit card balances have seen better days. And this holiday season sin not going to make things any easier. This is yet another price to pay that comes with a difficult year spurred by the pandemic.
Between Black Friday deals and Cyber Monday sales, the past few days have been great to get everything on your loved ones’ lists at a discounted price.
Addie Diaz says she took advantage of the sales and is helping her church. “Stuff for the kids: Batman, legos, things like that,” Diaz said.
NerdWallet’s 2021 Holiday Shopping report found that 75% of the country will be buying their gifts this season with credit cards. “Because I can pay later,” Diaz said.
But gift buying this year may come with its own nasty price.
For some, getting gifts means credit card debt. Sara Rathner is a Credit Card and Travel Expert for NerdWallet. “We’re talking about a really expensive year. And this has a habit of ballooning and sticking with you long into 2022,” said Rathner.
Rathner believes that almost 29% of Americans are still paying off last year’s holiday credit card balances. “Americans are planning to charge around $2,000 A little more between holiday travel and buying gifts. And that’s before you even factor in the cost of buying food to entertain people for the holidays,” she said.
Diaz says he used a credit card on Monday to buy those gifts. She’s thankful she can pay the entire balance when that statement comes next month. “Because a lot of people are still not working full time, and if they are, they still aren’t making ends meet. So they are doing what they can,” said Diaz.
The best way experts say you can make sure that credit card debt doesn’t snowball is to pay your balance off in full when the statement comes around every month. If you can’t do that, pay as much as you can, which should at least be the minimum balance.
Your next step should be to come up with a plan to tackle that debt.