Lingering Christmas Bills Can Lead to Debt Woes

N E W  Y O R K, March 7 -- If you're still paying off Christmas debts, it's time to take a hard look at how you're using your credit cards.

You won't be alone. Consumer counseling agencies see a 25percent increase in the number of people seeking help in Januaryand February, and most of that traffic is propelled to their doorsby holiday bills that haunt consumers like the ghost of Christmaspast.

"A lot of people get by, paying the minimums on their creditcards," said Durant Abernethy, president of the NationalFoundation for Credit Counseling. "Add on the holiday bills andall of a sudden, those minimums are more than they can afford."

You obviously can't go back and undo your Christmas spending.But you can learn from it.

Christmas Past

"People in trouble generally don't have a good idea of how muchthey spend," said Abernethy, whose group is the umbrella for thenonprofit Consumer Credit Counseling Service agencies around thecountry.

He emphasizes the importance of budgeting and planning ahead,saying: "If you need to use a credit card to reach a goal, youshould be able to pay it off in no more than 90 days — and,preferably, in 30 to 60 days."

Robert Manning, a senior research fellow at the University ofHouston and author of "Credit Card Nation — The Consequences ofAmerica's Addiction to Credit," believes part of the problem isthat the nation's ethic has changed.

"Our parents viewed debt as a shame and accumulating a nest eggas the right thing to do," Manning said. "The young see that as'old school' and have been convinced that going into debt isfine."

Industry of Debt

The result, he said, is that while 40 percent of credit cardusers pay their bills in full each month, the remaining 60 percentroll them over — and over and over. He calculates the averagebalance of these "revolvers" at more than $11,500.

"The debt industry — and it is an industry — has persuadedpeople that their 'wants' are 'needs' and that if you really carefor someone, you'll spend more money on them," Manning said."They tell you it's so easy, just use plastic. But they don't tellyou how it will hurt, in mounting debt and higher interest ratesand higher fees."