Christmas on Credit

Credit card sales were up dramatically over last year, but state officials say charging your holiday shopping can end up costing you in the long run.

Crystal House is checking out some hot shades. She’s not quite in the holiday shopping mood yet, but when she does get down to business, she’s got a plan: avoid the plastic.

Crystal says, "I just prefer to pay cash. I just like to go to the bank, get my money out so I won’t use any more or any less than I planned on spending."

There is good reason to stick with cash this holiday season, or at least keep to a budget. Statistics show Americans owe more than $800 billion on credit cards. That breaks down to nearly $8,600 per household.

The holidays are prime time for credit card purchases, and this year is no exception. Visa USA reported a 20 percent increase in credit sales this past Sunday over last year. All that charging has state officials concerned, especially for young people.

Tom Gallagher, Florida Chief Financial Officer, says, "More students leave college because of credit card debt than bad grades, so this is a major concern that that kind of debt can ruin a person’s future and their life."

Over-charging can quickly spiral out of control. If you’re late on just one payment, your credit card company can raise your interest rate, making your payments that much higher. So here are a few tips: pay off your cards monthly if you can. Make a list holiday gift list and stick to it, and resist hitting the stores after the holidays to rack up even more debt.

About 40 percent of credit card users carry a balance every month. Consumers are advised to use only one or two credit cards and cancel all others to avoid over-charging.