Payday loan holiday cash

ROCKFORD, Ill. -- It's easy to get caught up in the holiday spirit of giving and shopping till you drop. But be careful. Credit counseling experts with Family Credit Counseling Service warn that splurging now can leave you with the holiday blues well into next year. Although nine out of 10 Americans say they plan to spend about the same or even less this season, according to a recent survey by The NPD Group, it's easy to get caught up in the spirit of the holidays and quickly blow budgets.

According to cardweb.com, the average American household has a little over $9,000 in credit card debt. The financial pressures around the holidays make it even more difficult to keep credit card use to a minimum. Sam Fiorenza and his wife of Rockford, Ill., parents of twin children, know what this is like.

"We wanted to do something really special for the kids last year and we ended up spending a lot more on holiday presents than we expected, thinking we'd just pay if off before spring," said Sam. "But some unexpected expenses came and it was all we could do just to make the minimum payments on our credit cards. Now, it's November and we're still trying to pay for last Christmas, making this holiday even more stressful."

The convenience of using a credit card if you're low on cash can end up costing a lot more in the long run. For example, "Making minimum payments on a credit card with a balance of $2,000 at an annual percentage rate of 18 percent will take about eight years to pay off, costing about $2,000 in interest," said Michael McAuliffe, president of Family Credit Counseling Service. "Therefore, everything you buy on credit could end up costing you double by the time the interest is paid off."

To avoid paying for the holiday next July, Family Credit Counseling Service suggests the following ways to be financially prepared for the holiday season:

--Create a detailed gift list and budget. Account for all holiday expenses including gifts, travel and decorations, as these costs can unexpectedly add up. Stick to your gift list to avoid overspending, shop at dollar stores to buy decorative items like candles and wreaths and research the cost effectiveness of driving vs. flying.

--Don't be afraid to make changes. Financially strapped families should consider drawing names instead of buying presents for everyone in the family. Consider buying presents for children only or making a homemade gift that'll be more memorable. Or, suggest having a potluck dinner, rather than spending $300 on a meal you cannot afford.

--Use cash whenever possible. Credit card debt can pile up, creating stress months or even years down the road. Even writing checks can be dangerous now that federal law automates the check clearing process, allowing checks to clear in as little as 24 hours.

--Stay away from department store debt. While credit card debt in general isn't good, department store credit cards are even worse because their interest rates are nearly always higher than MasterCard, Visa, etc.

--Avoid the urge to use payday lenders. People are especially vulnerable to payday lenders -convenient outlets that loan money until the individual's next payday - this time of year. Such lenders may charge 1,000 percent interest or more.

For more holiday budget tips or if you need advice about your current credit problems, visit www.teachmeaboutcredit.org.

About Family Credit Counseling Service

Family Credit Counseling Service (FCCS) is a non-profit agency providing solutions for those seeking financial assistance. FCCS, headquartered in Rockford, Ill., is one of the largest consumer credit counseling agencies and has been servicing consumers throughout the country since 1996. FCCS's mission is to reduce the stress in consumer's lives through education, budget counseling and debt management. For more information call 1-800-994-3328 or visit http://www.familycredit.org.