Armchair Millionaire Community Bulletin: Conquer Your Holiday Bills

New York, New York (PRWEB) December 20, 2005

According to a survey by consumer education organization Myvesta, the average American will spend $747 on holiday gifts this year, which is up from $716 last year.

At the same time, another survey from the Consumer Federation of America and the Credit Union National Association reported that 25 percent are “somewhat” or “very” concerned about paying off their credit card debts from holiday spending. So if you’re feeling some anxiety about your holiday bills, you’re not alone.

Among members of the Armchair Millionaire community, however, we found quite a few who will be paying for the holidays without breaking a sweat. Here’s one story:

“I’m expecting to spend about the same amount as last year. Several people came off the gift list, a few were added, but the end result is within a few dollars of last year’s budget. Most purchases are going on credit cards, to be paid in full when the bills come in. We deposit all our loose change during the year, which pays for most of the Christmas gifts we buy, around $500 worth.” --Susan

But for most of us, the party’s over. The damage is already done. If you’re in over your head, my guide provides the key steps for tackling your holiday bills.

The Armchair Millionaire’s Guide for Taking Control of Your Holiday Bills

Pay more than the minimum. It’s all too easy to make only the minimum required payments on your credit cards, especially at a time of year when most of us are dealing with high home heating bills. But think twice: If you spend that typical $747 on holiday gifts this year, use a credit card with an 18 percent annual rate, and make only a minimum payment of 2.5 percent of your balance, it would take you a whopping ten years to pay down your debt. Just as bad, it would cost you $736 in interest--nearly as much as you spent on gifts in the first place! For a wake-up call on what your credit card debt really costs you, visit Bankrate.com and click on “calculators.”

Watch those interest-free offers. If you succumbed to one of those “zero percent financing” or “no payments ‘til 2007” deals, keep a close eye on the date your bill comes due. If you don’t pay off the balance in full by that time, you’ll be charged interest on the entire amount, dating back to the date of purchase. And the interest charged is often 20 percent or more--more than most credit cards. Keep in mind that companies wouldn’t offer these deals unless they made money on them. Don’t be one of the people they’re making money from.

Lower your rate and consolidate. Consider getting a low (or no) interest rate credit card and consolidating all your payments onto that one card. Keep in mind, though, that those low rates are just “teaser” rates, designed to entice you to sign up for the card. Depending on the terms of the card, you’ll only enjoy that nice rate for three to six months. Aim to pay off your balance before the low rate expires.

Use your bonus. If you got a holiday bonus this year, it may be tempting to blow it on extra spending or to just stash it away. But you may get the biggest return by simply using it to pay off your holiday debt. And if you’re still paying down holiday bills when April 15 rolls around, use your tax refund to finish them off.

Plan for next year. Open up a savings account and have 50 or 75 bucks a month automatically deposited in it from your checking account. You’re not likely to miss the money, and you’ll be all set when the holidays roll around next year.

THE BOTTOM LINE: For many of us, holiday cheer is accompanied by the headache of paying the bills. A few practical steps will ease your pain.

THE ARMCHAIR MILLIONAIRE WEEKLY SURVEY: Do you dream of early retirement? Log on to http://www.armchairmillionaire.com and let us know.

Lewis Schiff founded the Armchair Millionaire Web site in 1997. His first book, The Armchair Millionaire, was published in 2001. Schiff's newest report, "How to Know When You Are Rich," is now available at http://www.armchairmillionaire.com.

CONTACT INFORMATION:

Lewis Schiff

Armchair Millionaire

877-833-2823

http://www.armchairmillionaire.com

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