File photo of credit cards from the Detroit Free Press.
GRAND RAPIDS (WZZM) --- Recent studies show American shoppers have been spending heavily since Black Friday. Experts say that spending is a good boost for our economy but could land some people deeper in debt.
The latest report indicates shoppers spent $6 billion online the week of Cyber Monday. Financial experts say that is a record and it could be a dangerous situation if people didn't save up for all that Christmas shopping. The National Retailers Federation estimates the average person will spend $700 to put gifts under the tree this year. Much of that will be put on credit cards. WZZM 13 had a debt counselor crunch the numbers for us.
Julie Boss, a certified credit counselor with Greenpath Debt Solutions says if a shopper just pays the minimum monthly payment on that $700 every month, that shopper will pay a lot more than he or she bargained for and may pay as much as double.
"That average person it will take them almost 7 years to pay that off at the minimum monthly payment. So you are spending about $600 more than the $700 dollars that you originally spent and that is that is calculating an interest rate of about 21%," said Boss.
She says no one wants to be Scrooge this time of year and a few simple tips can help not to blow the budget on Christmas gifts.
* First, set a spending limit and shop with a list. Experts say people with lists are less likely to impulse shop and go over their spending spending limit.
* Do not buy all of your gifts at once. People who marathon shop are more likely to get stressed and buy anything just to get it over with.
* Consider drawing names or giving home-made gifts to cut down on the amount of shopping needed.
* Use cash whenever you can. But, if you do use a credit card pay it off as soon as possible.
Boss says it is amazing how many people have no idea how much they spend at Christmas time.
"If you feel that 'I need to buy for everybody' and you are going to have this $1,000 credit card bill remember the best gift to your family is to say 'we are going to spend money based on what we can afford.' It is a good lesson for your children. It is a good lesson for yourself and your whole family," said Boss.