Holiday Spending to Rise, But What About Credit?

Spending is expected to jump slightly during the looming gift-giving season, but holiday cheer is tempered with warnings to keep an eye on your credit, according to a report from The National Retail Federation and a primer from the Association of Independent Consumer Credit Counseling Agencies. 

The federation predicts a nearly 4% increase in spending this year, to $602 billion, over 2012’s actual holiday season sales growth of 3.5%. The forecast is higher than the ten-year average holiday sales growth of 3.3%. 

The association coined the term “Red Tuesday” to refer to credit card debt that results from overspending on the annual shopping superdays, Black Friday (November 29) and Cyber Monday (December 2). Consumers should budget now for holiday expenses, the association advised.

Following are the association’s Red Tuesday ABCs:

A – Know how much you can Afford. Take a hard look at your household budget and determine the amount of money you can spend without having to rely on credit cards. If you must buy some items on credit, be sure that you can pay off the cards in 90 days or less. 

B – Know who you are Buying for. Make a list and assign a dollar amount that corresponds to the overall budget. Don’t forget to include decorating and entertaining costs and make adjustments as necessary to stay within the spending plan. 

C – Know when to Cease shopping. Just like grocery shopping with a list, only buy the items on your list. Once your list is complete, vow to stay out of the stores until the holidays are over.