ABC news is reporting that consumer bankruptcy filings have fallen to their lowest level in nine months. While encouraging, the increased spending associated with the holiday season may offset this trend.  Here’s what you need to know about incurring excessive credit card debt, filing bankruptcy, and avoiding both.

Holiday credit card debt: What the (bleep) did I spend?

The problem with credit cards is their convenience; we convince ourselves that paying with plastic for everything from groceries to gems is somehow easier than paying cash. In the rush to buy gifts for everyone on your holiday list, it can be easy to lose track of holiday spending until the credit card bills arrive. Talk about “shock value.” Here are some hints for keeping your credit card debt under control.

  • Review your household budget: No one likes to think about budgeting during the holidays, but having a handle on your income and monthly expenses is important when establishing holiday spending limits.
  • Make a list, and revise it daily: Having a list of who you’re buying for and what you plan to spend on each recipient can help with staying on track. Stick to your list, and remember to check with others in your family daily. This can prevent duplicate purchases and help keep the credit card bill from going through the roof.
  • Watch out for retail credit card offers: Stores and other credit providers may offer opportunities for one day discounts or for placing big ticket items on an installment plan with no interest charges during a promotional repayment period. Be careful. The interest charged on these kinds of offers can negate any potential benefit of opening new credit cards. If you don’t pay off that zillion inch flat screen during the promotional period, you could be hit with deferred interest on the entire purchase price.

Bankruptcy Blues: The consequences of blowing your budget

If your credit card debt is out of control, you may benefit from debt consolidation and credit counseling programs that can help with avoiding bankruptcy. Although there is no way to “erase” bad credit or instantly “boost” your credit scores, avoiding bankruptcy can save up to ten years of negative reporting to credit bureaus. You don’t have to own a home to get debt help. Non homeowner debt consolidation is available through consumer credit counseling and debt consolidation programs.

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