Freedom Debt Relief Offers Tips to Avoid Holiday Credit Card Overindulgence

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Americans are on right track, but must remain vigilant to stay out of credit card debt.

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If you are unsure what to buy, search online for gifts under $20 to get some ideas. More shoppers also might be turning to eBay and other discounters to extend their dollars.

This year, Americans spent less and used less credit on "Black Friday," a sign that consumers are moving in the right direction to avoid over-spending at the holidays. As the holidays approach, Freedom Debt Relief offers tips to help consumers stay on the right track and avoid excessive debt this holiday season.

"Black Friday," the day following Thanksgiving, is when shoppers traditionally launch the holiday shopping season and spend enough to put retailers in the black for the year. However, for many consumers, it could be called "Red Friday," because it is when they put themselves in the red for the year.

According to the National Retail Federation (NRF), more shoppers hit the stores this year than last year, but they spent less per person. "Overall U.S. consumer spending is predicted to drop this year, but if you are a shopper who is used to putting holiday expenses on credit cards, this year – more than ever – may be the time to think twice before charging," cautioned Andrew Housser, co-founder and co-CEO of Freedom Debt Relief (FDR).

That caution comes as credit card issuers are tightening restrictions, and many Americans are still feeling the impact of a sluggish economy, with unemployment still hovering above 10 percent in October.

FDR, a national consumer debt settlement provider, helps people get out of debt, which means they know a great deal about how people get into debt trouble. Here are FDR's top six ways to avoid holiday debt problems:

1.    Budget. Know what you have to spend, and don't go beyond your means. "This season, retailers are slashing prices. That can help shoppers stick to their budgets," Housser said. "If you are unsure what to buy, search online for gifts under $20 to get some ideas. More shoppers also might be turning to eBay and other discounters to extend their dollars."

2.    Spend with cash. Cash is a growing trend: Just 28.3 percent of U.S. shoppers expect to use credit cards this holiday season, down from 31.5 percent last year, according to a survey released in November by the NRF and BIGresearch. In contrast, 25 percent of shoppers will use cash. These trends held true over Thanksgiving weekend, when 26 percent of shoppers used credit cards, 39 percent used cash, and the remainder reported using debit cards.

3.    Do not buy for yourself. Stick strictly to your gift list. The only exception should be a great buy on an item you have planned to purchase, and for which you have dedicated cash in hand.

4.    Resist store cards. Although they might offer introductory 0 percent interest rates, those rates will expire – and sooner than you expect. Many store cards carry regular interest rates of 20 percent or more. Additionally, your credit score may take a slight hit from opening a new card.

5.    Read fine print. Review all materials from your credit card issuer. Up to 50 percent of Americans say their credit card interest rates have increased in the past six months. Many lenders are raising rates before the Credit CARD Act's reforms take effect in February.

6.    If you do use a credit card, choose wisely. Choose one card with the lowest annual interest rate, and only charge what you can afford to pay off when the bill comes. Be sure you will not exceed your credit limit. "Putting purchases on a single card helps you keep track of spending (check balances online or by phone if you are not sure)," Housser explained. "Be sure to check your current credit limits before you begin using credit cards, too. Many card issuers have lowered credit limits in the past year."

Increasingly, American society focuses on spending as the centerpiece of holiday celebrations. That means many people will go into the red by racking up debt at this time of year. "Debt at the holidays is often just accepted, just as many people accept overindulging in food or drink as part of the celebrations," Housser said. "But these actions have real repercussions. It is possible to avoid debt and holiday overindulgence by planning ahead -- and using a few tricks to eke out extra holiday buying power."

Those who are in serious debt hardship may consider carefully choosing debt relief help. "If you need help, it is out there," said Housser. "Carefully review references when choosing the person or company to assist you. If you are already in a situation in which you cannot make the payment obligations on your existing credit card debt balances, seek out a reputable debt settlement advisor to review your options."

About Freedom Debt Relief (http://www.freedomdebtrelief.com)
Freedom Debt Relief provides consumer debt settlement services. Working for the consumer to negotiate with creditors and lower principal balances due, the company has served more than 70,000 clients since 2002. Freedom Debt Relief is a wholly owned subsidiary of Freedom Financial Network, LLC (FFN).

Based in San Mateo, Calif., FFN also operates offices in Sacramento and Tempe, Ariz. The company, with 580 employees, was voted one of the best places to work in both the San Francisco Bay Area and the Phoenix area in 2008. Company co-founders and co-CEOs Andrew Housser and Brad Stroh were named to the Silicon Valley/San Jose Business Journal's "40 Under 40" list in 2008, and are recipients of the Northern California Ernst & Young 2008 Entrepreneur of the Year Award.

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Aimee Bennett
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