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For Immediate Release Contact: Patrick Harris Director of Media Relations Ohio Credit Union League pharris@ohiocul.org 800-486-2917

Tips to Keep Holiday Debt Under Control

Columbus, Ohio (November 30, 2011) The Ohio Credit Union League (OCUL), Credit Union National Association, and Consumer Federation of America suggest the following tips to avoid getting deep into debt during the holidays.

“Though unintended, it is common to let wise spending habits lapse during the holiday season,” said Paul Mercer, OCUL President. “However, there are ways to spread cheer without busting your monthly budget.”

Make Budget, and a List: Decide how much you can afford to spend and stay within that budget. Staying within budget will be much easier if you make a price list of all gifts and other holiday items you plan to purchase. It's easy to overlook extra expenses for holiday foods, party clothes, holiday décor, and postage. Even if it’s a more general rather than detailed list, it will still help you avoid overspending and impulse buys. 

Comparison Shop: You can easily save more than 10 percent on most items, sometimes considerably more, by comparing prices at different stores. The easiest way to do this is using the Internet and comparing offers online. But when shopping online, shop wisely. Be sure you are purchasing from a secure site and review e-mailed statements as you receive them for accuracy.

Pay Off Debts Quickly: You’re less likely to overdo it if you pay in cash. If you must make holiday purchases using credit, use a lower-interest card (you’ll often find lower rates on cards from a credit union) and pay off this debt as soon as possible early next year. Don’t borrow more than you can repay within several months. Remember that credit card debt is relatively expensive. If you only make the required minimum monthly payment, you may never pay off the debt.

Plan for Next Year by Opening a Christmas Club Account: While these accounts do not pay much if any interest, they provide a practical way to save small amounts over time. Ask your credit union or bank to automatically transfer funds from your checking to your Christmas Club account every month. The discipline of saving reinforces your good budget intentions.

See what’s in your supply drawer:  You may have more wrapping paper, ribbons, unused cards, and gift boxes stored away from last season than you realize. Use up those holiday supplies first to trim down the amount you’ll have to buy this season.

Shop after Christmas for Next Year’s Presents. You can find some great sales bargains right after the holidays. Then tuck those gifts away until next season.

 Understand how layaway programs work. An old holiday standby—store layaway programs—have re-emerged this holiday season, allowing consumers to put items on hold at the store and pay for them over time.  Before deciding to use layaway, know the payment schedule and read the fine print. Be realistic about how these payments will fit into your spending plan and what you can really afford. Understand the layaway policy, including time between payments and schedule of payments, service fees, late and cancellation fee policies, refund and exchange policies.

Be Smart About Gift Cards: Rules that took effect last year significantly restricted gift card expiration dates and fees. But those who give or receive a gift card should still read the fine print. If you get a gift card, use it sooner rather than later to avoid forgetting about unused balances on the card, or forgetting about the card altogether.

Pay Attention to the Return Policy.  Some stores have tighter policies. Pay attention to the return policy when you make a purchase; keep receipts and note time limits, restocking fees, and other factors that may affect your recipient. 

Find Low- or No-Cost Ways to Celebrate. Adding a few changes can ease the strain on your spending budget.  For example, draw names to limit the number of people for whom you purchase gifts; give homemade items; make your own gift wrap; or organize a potluck rather than trying to make, and pay for, the entire holiday meal. 

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The Ohio Credit Union League, with offices in Columbus, is a state trade association representing 382 credit unions. Credit unions are not-for-profit financial institutions owned and democratically-controlled by their members. Ohio credit unions provide savings, loans, and other consumer financial services to their 2.68 million members. To learn more, visit www.ASmarterChoice.org.