Monday, November 23, 2009

Protecting Your Credit During the Holidays


By Nan Jensen, Family and Consumer Sciences

As you gear up for Black Friday, Cyber Monday and the holiday shopping season, we’d like to offer you some tips on how you can use your credit cards wisely to keep your spending in check.

Set up a holiday budget. Without a predetermined spending limit, you can easily max out your credit card or charge more than you can afford. Before you hit the mall or the computer, figure out how much you can reasonably spend and keep that amount in mind as you shop. Create a list of all the purchases you will make that are specific to the holidays. Think about who you will be buying for, contributions to holiday parties at work or your child’s school and any extra entertaining you might do at home. You may tend to eat out more when you are shopping, or because you are busier around the holidays, so add those expenditures to your list. If you make charitable contributions around the holidays, add those to your list.

Make a list of people you need to buy things for. Try to think of what you have in mind for each person. If it is not a specific item, then you should think in terms of specific dollar limits. Without setting this in advance, it can be easy to overspend.

Beware of store credit cards that “save you money” on that purchase. Many stores typically offer enticing offers during the holidays by encouraging you to get a store card and save an extra 10% or more on purchases that day. This works only if you pay the balance charged back in a reasonable time frame. With the high interest rates (20%or more) you typically pay on the balances of those cards, that $50 savings on a $500 purchase may not be savings at all if you have to spread the payments out over time.

Don’t max out your credit cards. If you max out your credit card during holiday shopping, this can impact your credit score. According to Fair Isaac, a credit scoring program widely used by credit bureaus, about one-third of your score depends upon your "utilization ratio," or how much of your available credit you actually use. Experts recommend that you keep your balance below 30%, or $300 for every $1000 of available credit.

Keep track of your holiday credit card spending. What good is a budget if you're not keeping up with it? Check your receipts to make sure you're not spending too much.

Don’t fall for the “skip a payment” offer from your credit card company. Credit card issuers commonly make this offer around the holiday season. It can become a problem if you carry a balance on your card. The offer is designed to entice you to skip your payment but the interest would be applied to the full amount for that month. Skipping payments can get very expensive very quickly if your balance and interest rates are high.

Plan to pay off anything you charge on the holidays within 1-2 months at the longest. Considering the holidays come every year, you will never be able to get ahead if you are still paying off debt from last year when you begin holiday spending for this year.

Save those receipts. Make sure to keep them together in one location, as you may need them for returns and exchanges. Check credit and debit card sales and return receipts against your monthly bills and statements. Report any problems to the credit card issuer right away.

Keep an eye on your wallet. Don’t flash any cash you might be carrying. Watch your credit or debit cards during transactions, and get them back as quickly as possible. If your cards are lost or stolen, report the loss or theft immediately to the card issuers. To report your credit card lost or stolen, call the customer service number on your billing statement.

Make a New Year’s resolution. To avoid credit card use, begin setting aside a little money from each paycheck in January in a special account reserved for holiday expenses. Saving just $10 a week will give you a nearly $500 head start when December rolls around. Check to see if your bank or credit union offers special holiday savings accounts, or consider a direct deposit from your paycheck.

Here is a holiday budget sheet to get you started.

Monday, November 16, 2009

The Truth About Payday Lending


By Karen Saley, Extension Specialist

With the holidays just around the corner and money being tight for many of us, you may be considering a short-term payday loan. Before you run out and borrow that money let’s look at how these loans work.

You write a personal check payable to the payday lender for the amount you want to borrow, plus the fee you must pay for borrowing. The company gives you the amount of the check less the fee, and agrees to hold the check until the loan is due, usually your next payday. The fees on these loans can be a percentage of the borrowed amount — or they can be based on increments of money borrowed: say, a fee for every $50 or $100 borrowed.

So let’s say you borrow $100.00 and the fee is $15.00. When you get your next paycheck you will need to give the payday lender $115.00. You may be saying to yourself, well that’s not so bad; I borrowed this money at 15%, that’s lower than the interest rate on my credit card. What you need to consider, however, is how long did you borrow the money? A week, two weeks? Then what happens if you can’t pay back the original amount in that time period? You “rollover” the loan and now you have borrowed $115.00 with another $15.00 fee attached. You now owe $130.00 and it has cost you $30.00 to borrow $100.00.

So if you are considering one of these short-term loans to cover holiday expenses you may want to reconsider. Look at other ways to make your holidays special. If, however, you find yourself in a position of not being able to meet your living expenses here are some things to consider before visiting your local payday lender.

~Contact your creditors and discuss the possibility of adjusting your payment amount and/or schedule. Be sure to ask what type of fees may be involved in restructuring your account.
~Contact a reputable credit counseling agency to help you set up a debt repayment plan or help you create a spending plan that fits your circumstances.
~Shop around for a low-cost loan from your credit union or small bank. Remember to ask about interest rates and fees.

Contact to speak with a financial counselor free of charge and for more information about payday lending visit

Thursday, November 5, 2009


By Nan Jensen, Families & Consumers Agent, Pinellas County Extension

Holidays can be stressful even under the best of circumstances. But because of the economy and the high rate of unemployment, holidays this year may be particularly trying. Loss can trigger depression during the holidays.

Here are some strategies to help you deal with the stress during this holiday season.

Focus on what you have rather than what you don’t have.

~ Enjoy the little traditions that evoke positive memories for the holidays: songs, events, rituals, and more.

~ Come up with new holiday traditions – ones that don’t involve much money and that focus on family togetherness. Set aside time to create as a family new and inexpensive holiday decorations and gifts. Enjoy activities such as visiting displays, attending parades, viewing holiday lights or volunteering.

~ Spend your time with people you love and care about.
Take care of yourself-both physically and emotionally.
Your mental health is affected by your physical health, especially at holiday time.
~ Take care of yourself by getting enough sleep and making healthy food choices.

~ If you drink alcohol, limit your daily consumption. The Dietary Guidelines recommend no more than one drink for women and two drinks for men. This will not only save you calories but can help you “manage your mood” as well. Too much alcohol can trigger depression.

~ Exercise is important, too. Walking reduces stress and helps ward off weight gain.

~ Practice relaxation exercises (i.e., stretching, deep breathing, yoga, meditation).
Manage Your Time
~ Schedule your activities in advance. Break projects into small steps so you won't feel overwhelmed.

~ Involve family members in getting the holiday chores done.

~ Don't accept every invitation. Chose the events you want to attend.

~ Don't over-schedule. Leave some time unplanned for you and your family to relax and just be at home with each other.
Watch what you spend.
Overdoing it with credit cards and spending causes stress at the holidays. Try to keep spending under control.
~ Set spending limits for gifts for each person as well as for other items on your holiday list. Then search out the sales and specials to take advantage of the best buys.

~ Pay with cash and leave the credit cards at home. If you plan to use a credit card, select just one to use for your holiday spending. It’s much easier to control your spending on one card than using several cards.

~ If your children ask for something nonessential such as a video game system that does not fit into your budget, be honest with them and tell them you can’t afford it this year.
To help you control your holiday spending, join us on November 18 for a Solutions in 30 webinar entitled “Protect Your Credit during the Holiday Season”.

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