How to avoid credit card debt during the holidays

Consumers in Alabama that have not already started furiously swiping their credit cards during Black Friday buying binges will likely be doing something similar as the holiday season wears on. The pressure to purchase gifts during this time of year is enormous, and many consumers reach for their credit card as they do not always have adequate cash at their disposal. Insurmountable credit card debt can lead to everything from a lawsuit, bankruptcy and even collection harrassment.

Luckily, reports from the National Retail Federation paint a concerned public that is leery about the recent recession and aiming to avoid maxing out their credit cards as the holidays inch closer.

Utilizing in-store financing is one way consumers manage to walk away with the items they want even when they are short on cash. Many stores advertise the fact that consumers do not have to make a payment and face no interest within a certain window of time. This is all fine and well, but consumers should only accept these offers if they can pay the item off in that period of time. Otherwise, interest can be tacked on retroactively to the full price of the item, making it a pricy purchase while dinging a consumer's credit.

During the holidays, stores also push their credit cards hard. They often offer free deals if a consumer signs up. Consumers should only sign up for these cards if they do not carry a balance. The cards generally carry steep interest rates that could make a modest balance spiral out of control in a hurry.

Consumers can also purchase items right away after agreeing to make small payments over a period of time, which is known as layaway. This can be a great way to buy big-ticket items, but like the other avenues, it can lead to trouble. Fees and surcharges can also factor in.

Credit card debt is a major factor that leads many Alabamans down the path of financial ruin. These debts can be discharged through bankruptcy, but most consumers would agree that it is better to avoid accumulating debt if, and when, possible. Should an Alabama resident find themselves dealing with the debt, contacting legal counsel could be a good first step toward recovering from it.

Source: The Huffington Post, "Holiday Shopping: How to Buy Gifts Without Maxing Out Your Credit Cards," Ken Lin, Nov. 20, 2012