Do Not Overspend during the Holiday Season!

Post by David Held

With the Holidays coming around consumers must be careful in regards to what they spend. It is expected that everyone will be spending, but some people will spend more than they can afford. It is crucial that consumers monitor what is in their bank accounts and budget accordingly.

Credit cards and debit cards can become a recipe for disaster. If I had to pick between the two I would go with a debit card because one you use the card it directly takes the money out of your bank account. Credit cards allow people to spend money that they do not have. I prefer cash over both types of plastic because when purchasing with cash it actually fells like you are giving up something for something in exchange, which is not the case when you use plastic.

If consumers overspend using their debit cards they will be hit with overdraft fees. If people overspend with credit cards, at first nothing will happen, but if the consumer cannot afford to pay back credit card companies their credit scores will decrease. Having your credit score go down makes it extremely difficult to take out loans, mortgages, etc (which can be a real problem if you are young). It is crucial that consumers not overspend this holiday season, especially since the economy is miserable.

Sources #1, #2, #3