Just Charge It – Instant Gratification and Holiday Spending
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Well, Christmas is tomorrow, so I hope you have all your holiday shopping done. If you’re like me, then you might not. Just as John wrote about not exchanging gifts this year with his wife, we are doing something similar. Instead of a gift, my wife and I are going to be going out on a date night. With a two year-old running around, we don’t get to enjoy many of those these days.
I feel this “gift” is even better than some trinket or other gift. I get to spend time with my wife and have a nice date night. Either way, as I have driven around town going to work and back, I pass near some very busy retail establishments. I haven’t seen them this busy in years. It appears some kids and loved ones are going to be very happy this year with the presents under the tree!
When I do pay attention to this holiday shopping craze, I’ve noticed a disturbing trend that I don’t particularly enjoy. In both TV commercials and in storefronts, I have seen a massive push to get people to “charge it” and deal with the payments later. Hell, I even listened to a commercial the other day that just told people to charge it and wait until the new year to pay it off. I hadn’t heard such a brazen commercial before. It was for jewelry, of course!
Why the ‘charge it’ Strategy Sucks for Most People
I used to live by the “charge it” now and pay it off later strategy. This seems to be the general consensus when the holidays come around. There are many who can’t afford to pay for Christmas gifts, so they will pull out that little plastic card and get to swiping. Remember, I was in a lot of debt, about $50,000 in just credit card debt alone. This mentality is what landed me in that position. My terrible decision making and spending habits went on for years. I didn’t just wake up and have massive credit card debt, it took years to put on that financial weight. It also took years to pay it off. My spending and decision making sucked back then.
When the economic outlook gets better, people start spending more money. While most haven’t gotten paid more, they resort to just using credit cards or credit in general to fund their spending. This is just a bad idea, especially when it comes to nominal gifts for Christmas. My reasoning back in the day for spending so much when I didn’t have the money was I wanted to please my wife. I just wanted to see the look on her face when she opened a brand new digital camera or nice trip. I spared no expense. Unfortunately, those expenses didn’t spare me. I had to pay them back over time, even though I didn’t have the money to do it.
The “charge it” strategy is just not good for most people. Yes, it provides them with the instant gratification of getting a gift for their loved ones, but it also adds more to their piling debt. For those who carry a balance, the average US credit card debt in the US is $15,611 according to NerdWallet. That’s a lot of money and a lot of debt. What’s the point in adding more to that number just for Christmas gifts?
Consumers Want it Now, but Don’t Want to Pay for it
Our terrible spending habits are really just a result of our culture. We, as Americans, have access to different forms of credit. We can leverage our credit cards, home equity lines, personal loans, payday loans, and many other forms. If we need to find money, there is more than enough companies willing to provide us with funding. This all comes at a steep cost to us. Interest rates are high for many of these credit forms, but it’s all about convenience right? Our thought processes are backwards and this needs to be reversed. I used to be this way. Buy it now and pay it off later or over time. It’s all wrong if you ask me.
While I don’t mind using my credit card to purchase a gift for my son, the difference is I have the cash on hand to pay for it. I just want the rewards points. I pay off my credit cards every month and have since I paid off the last of my credit card debt over two years ago. I switched my thinking about debt and the repercussions it brings to me and my family. The retailers are trying their hardest to get me to spend money I don’t have as long as it adds to their coffers.
Well, I don’t want to play that game. My spending will not be dictated by what awesome sale I can get or discount I can find. My spending will be dictated by me and when I want to part with my hard earned money.
It’s time to stop this “charge it” holiday spending spree mentality. Credit cards are useful tools when used in the right way. Unfortunately, many of us don’t use them the way we should. Why not try “charging it” only when you have the funds available to pay it off or when you want to earn rewards? Let’s bust this “charge it” mentality for the holidays and get our budget back on track and our financial lives in order for the new year.
Have you “charged it” lately or seen the advertisements pushing consumers to just use their credit cards to get Christmas gifts? What are your thoughts on this marketing practice? Are you planning to start the new year off with less debt? If so, how?
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