Christmas Credit Card Debt For 2011?

Merry Christmas! Do you have holiday credit card debt? Or are you having the last laugh?

Merry Christmas cross - IStockPhoto #18433289So being that it’s Christmas day 2011, I thought now would be a good time to talk about this (but in all honesty, I actually wrote this post before today).

Over the last few weeks I’ve seen a number of articles which seem to portray U.S. Christmas spending on credit cards to be out of control… but is that really an accurate representation of what’s going on?

Take this Associated Press article from December 7th which tells us that Americans charged more to their credit cards for the 2nd straight month, citing the Federal Reserve’s Consumer Credit statistics. From that, the article seems to infer card debt is increasing.

In reality, it’s tough to say whether that’s true.

The problem with this data is that is that it doesn’t decipher between long term revolving (credit card) debt and that which is paid off without interest. The result? Over-extrapolation of statistics.

Without a doubt, there are surely those who are using their cards to rake up debt from Christmas shopping. However on the flip side, there are those such as myself who are charging a lot more to their credit cards for holiday related expenses (gifts, travel, etc.) but it’s being paid in full.

Christmas credit card offers can be a curse or blessing

During the 4th quarter every year, you have probably noticed that your existing cards send you holiday promotions; extra points and cash back for spending a certain amount.

Obviously the intentions behind these offers are quite transparent… they know the average American will be spending more during the holidays and they want to get a piece of the action, which possibly leads to a hangover of high-interest debt.

However almost every forum member I’ve seen discussing these bonus reward offers aren’t using them as an excuse to spend more or rake up debt, but rather for strategic purposes to earn more rewards during the holidays on purchases they were going to be making anyway.

The lesson?

For many, credit card debt after Christmas truly is a real problem… and those people should stop using credit cards altogether.

However for the more savvy consumers (shameless plug: such as CreditCardForum members) the increased spending on cards is done for rewards, not debt or overspending. So attention media outlets: don’t automatically stereotype this trend – sometimes it’s the consumers getting the last laugh this time of year.

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