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When holiday credit card debt follows you all year

As shoppers head to the malls and their laptops this holiday weekend to begin their holiday shopping, NerdWallet has some sobering information on Americans' spending and charging habits around gift giving. In a recent survey, most people said they plan to spend approximately the same as last year. The average predicted expenditure was $660.

That's despite the fact that about a quarter of the 2,000-plus respondents admitted to overspending last year. Also troubling was the acknowledgement by 27 percent that they weren't making a gift-giving budget this year.

Also concerning is the fact that many people are still paying off credit card debt from last year's Christmas presents. Interestingly, while baby boomers are more likely to charge their holiday purchases than younger generations (just under two-thirds), it's millennials who are most likely to still be paying off last year's holiday credit card debt (just under a quarter).

Millennials are the group most likely to need a solid credit rating to purchase a home, car and other big-ticket items. Therefore, racking up credit card debt, particularly if you're unable to pay it off, can be dangerous to your financial future.

Everyone, regardless of age, can keep their holiday spending from getting out of control by making and sticking to a budget based on your overall financial situation.

Experts recommend that people follow an overall "50/30/20" rule, with 50 percent of your income going toward what you need, 30 percent to what you want, and 20 percent toward saving and paying off debt. Holiday expenses fall within that second category.

Once you know how much you have to spend on each person, shop smart. Virtually everyone seems to be having a sale this time of year. "Black Friday" is now at least week-long event for many retailers. With so much competition for shoppers' dollars, many retailers have valuable coupons and offers to entice buyers.

Finally, if you use your credit card for purchases, pay it off immediately or as quickly as possible. The longer you carry over debt, the more of your payments are going toward interest rather than the principal you owe. If your debt is overwhelming, it's wise to explore your legal options.

Source: CNBC, "An alarming number of shoppers are still paying off debt from last Christmas," Emmie Martin, Nov. 17, 2017

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At the law offices of William H. Oliver, Jr. & Associates in Toms River and Lakewood, New Jersey, we represent clients in Toms River, Neptune, Trenton, Middletown, Red Bank, Wall, Lakewood, Lakehurst, Manchester, Asbury Park, Old Bridge, Jamesburg, Barnegat, Forked River, Manahawkin, Ocean Township, Brick, Manasquan, Howell, Freehold, Hazlet, Bradley Beach, Brown Mills, Long Branch, Keansburg, Marlboro, Bayville, Beachwood, Whiting, Sayreville, South River, East Brunswick, Monmouth County, Ocean County, Middlesex County, Burlington County and Mercer County.