It’s Your Money Column – Credit Card Trap Snaps Shut During the Holidays

Question: It seems like I’m always short of money around the holidays. I use my credit card and then spend the rest of the year paying it off. What can you suggest?

Answer: It is really a paradox that the best intentions can cause so much pain. Because we love our families and want our children to have a wonderful experience, we spend more than we can afford, and then the headaches appear.

According to a survey by, nearly 50 percent of people with debt problems experience depression. Of those, just under 40 percent report symptoms of severe depression. In general, studies have shown that 9.5 percent of the general population is considered clinically depressed. At the very time that people want to enjoy life with family and friends, they are overcome with financial concerns. How does this happen?

There are several common financial situations that people experience at holiday time:

  • Although no money has been saved, people still want their families to have lots of presents to unwrap. If there is no money, what do you use? Credit.
  • Perhaps the year has not been the best, with a layoff from a job or serious illness. Still, parents think it’s terrible to punish children by spoiling the holidays, so they spend the same as they did when money was plentiful.

Here’s what’s sneaky about using a credit card. First, it is painless to use, so people often buy more than they realize. The use of credit sneaks up on us. People have the tendency to buy more when they use their credit cards than when they pay cash. Research indicates that consumers spend (on average) $9.09 when they pay cash, $42.25 when they write a check and $46.01 when they use a credit card.

Second, a credit card has no memory and does not consider additional obligations. It can’t help someone think of rent and car payments that will be due at the same time the credit card bill is due.

Is it possible to enjoy the holidays without getting the January financial flu? Family and true friends want to be with you in bad times as well as good times. Bring your family together to help plan things that will make this holiday season happy and joyful – even without much money.

More on this topic next week.