FT. LAUDERDALE, Fla. – Consumers will spend less this holiday season with more than 8 million people no longer using credit cards to makes purchases. Credit card companies are fighting back with greater incentives and the financial experts at Consolidated Credit Counseling Services, Inc. are warning Americans about credit card risks.
According to the National Retail Federation’s (NRF) 2011 Holiday Consumer Intentions and Actions Survey, Americans will spend an average of $704.18 on holiday gifts and decorations, down slightly from last year’s average of $718.98. However, retail sales expectations for November and December show a 2.8% growth to $465.6 billion. Even in a shaky economy, consumers are willing to swipe for the right price.
Declining credit card usage over the past year has credit card companies boosting their reward incentives in hopes of luring customers back. This holiday season consumers are more likely to use cash for purchases, hinting they’re concerned about taking on high-interest debt in a weak economy. Creditors are offering free gift cards, triple bonus points, and air miles but consumers need to understand the broadening restrictions that apply to these rewards.
“People need to read the fine print and speak with the card issuer about details related to bonus points and incentives. If you have the money to pay-off the credit card purchases before payment is due it is OK to use your card to get additional rewards,” says Howard Dvorkin author and founder of Consolidated Credit Counseling Services, Inc., a financial literacy provider that has helped more than 5 million Americans pay off their credit card debt. “Let’s say you sign up for a Target card which offers 5 percent off every purchase. If you don’t pay the balance within 30 days of the purchase, that 5 percent becomes nonexistent when the 25 percent interest rate is added onto your balance. It is important to know all aspects of your credit card contract and act wisely,” Dvorkin continued.
Due to creditor attempts to gain new credit card users, Consolidated Credit cautions consumers to be smart when trying to get the most from credit card offers and rewards.
Tips for Managing Credit Cards This Holiday Season:
- Read the fine print. Become educated about new rewards/bonus points/incentives creditors are offering for swiping a credit card. Shoppers can’t expect to follow rules and guidelines if they don’t know what they are.
- Only swipe what can be paid off in 30 days. To establish a positive credit score people can use credit to pay for monthly bills such as electric, auto payments, etc... This is a can be a good way to get rewards because the money to pay the bills should be in their monthly budget. Caution: this method can backfire if a person is not saving enough money to pay off the balances each month.
- Know interest rates and credit balances before holiday shopping begins. In order for people to be successful managing their credit, they must be up-to-date about their credit card balances, interest rates, payment due dates, and how long specific interest rates last.
- Seek out cards with the best rewards. Find a credit card that offers double or triple points. One resource to find the best credit card is creditcards.com.
- Pay credit card bills on time every month. By paying credit card bills in full and on time each month, people can prove they are trustworthy.
Consolidated Credit Counseling Services, Inc., founded in 1993, is one of the nation's largest credit counseling organizations in the country and has helped over 5 million people with financial issues. Their mission is to assist families throughout the United States in ending financial crisis and solving money management problems through education and professional counseling.