Stop your last-minute holiday gift shopping! The euphoria over the arrival of the Covid 19 vaccine has encouraged a surge of optimism that’s resulting in a huge bulge in credit card debt-=- even among people whose income has been impacted by the pandemic.
That’s the conclusion of a new report posted at LendEdu.com—a website devoted to tracking all sorts of debt, from student loans to mortgages and credit card debt. The latest statistics are eye-popping. I had to read them twice to process the fact that — in an effort to make a lonely holiday more cheerful — people are overspending, mostly online.
It’s so easy. Forget about pulling out a credit card and typing in the numbers. Your computer and smart phone recognize your PayPal presence and automatically fill in the account number and shipping details. Literally, one click is all it takes to share holiday cheer. And lead you into a post-holiday debt hangover.
Here’s what’s happening out there according to LendEdu:
• 33% of Americans are taking on credit card debt this holiday season to cover holiday shopping costs during the pandemic recession, including 48% of those laid off during the pandemic, and 51% of those still out of work.
• For 63%, the credit card debt they amass this holiday season will be the most they’ve ever taken on. The same is true for 72% of those laid off during the pandemic, and 75% of those still out of work.
• On top of credit card debt from this holiday season, 74% of Americans said they already have too much credit card debt due to the pandemic recession, including 80% of those laid off during the pandemic, and 86% of those still out of work.
• 55% of Americans are losing sleep over the credit card debt they have amassed from both holiday shopping & the pandemic recession, including 70% of those laid off during the pandemic, and 72% of those still out of work.
Here’s a link to the entire study online at LendEdu.
Obviously, these statistics include and reference more than just holiday shopping euphoria or convenience. Many families are barely surviving on lowered income and have no choice but to charge food and necessities on their credit cards.
Some of those people may be facing eviction and homelessness when unemployment benefits run out and the CDC prohibition against evictions runs out at the end of the year –unless something is done to extend those protections. Credit card debt will be the least of their problems.
But others, who could make it through tough times until business resumes in a few months, are choosing holiday spending as a narcotic to get them through a bleak and lonely winter. There is a choice to stop spending now. But, in a way, that’s like asking an alcoholic to stop drinking. It feels so good at the moment, and addiction is tough to overcome with will power.
Yet that’s exactly what Americans need to do. And even if you’re not that “shopper” piling up credit card bills, you can help by sending a message to family members that gifting will be different this year. Encourage relatives to make a creative video or join in a zoom call and sing a holiday song in place of gift exchanges.
Keep this number handy. 800-388-2227. That’s the National Foundation for Credit Counseling, and it will connect you to the nearest local office. Call before you place the next online order. And be ready to tell them the outstanding balances on your credit cards right now. Even if the bill hasn’t arrived, you can find that outstanding amount online. It will be a sobering reality check.
Even worse, remind yourself that by making only the minimum monthly payments on that debt, it could take you over 30 years to pay off the balance! And you will pay twice again in interest over the years on the amount you originally charged!
Help stop the madness of holiday overspending. It’s a drug with a hangover that won’t come till mid-January when the bills arrive. But the after-effects could linger for a lifetime. And that’s the Savage Truth.