It’s a Credit Card Christmas

It's a Credit Card Christmas | Money Savvy Living


I’ll be fine and dandy, Lord it’s like a… credit card Christmas. I’m barely getting through tomorrow… But still I won’t let… spending get me way down…


Did you think I was going for a “hard candy” Christmas?  You probably even started to sing along, didn’t you?  Don’t be shy… I know you heard the tune and now it’s stuck in your head, am I right?!


Well, it may or may not be a “hard candy” Christmas for you, but it certainly is going to be a credit card Christmas for millions of Americans this year.  A recent Holiday Spending Survey, found that the average individual plans to spend $738 for Christmas this year.  When you add that up for the 245 million adults that plan on doing this shopping, you reach a staggering figure of $181 billion on gifts this holiday season!


If you were floored by that figure, wait until you hear this… of those 245 million shoppers, 64 percent of them will use credit cards, or some form of debt, to buy those gifts!  So within the next couple of weeks, over $103 billion dollars in debt will be acquired by Americans just for Christmas shopping.


Buying the Perfect Gift is Not an Excuse to Overspend | Money Savvy Living


So, how can you keep yourself from having a credit card Christmas?


If you haven’t been planning throughout the year already, you can’t really change that at this point, but there are a few things that you can do to help yourself from relying totally on credit cards to pay for Christmas:


Use cash—yes, obvious, but as much as you can, use cash.  Using cash keeps you in the clear, so you don’t have to worry about compounding interest on those high interest rate cards.  Even if you pay for half of your gifts in cash, that will be less to pay off in January.  Every small step that you can take to paying off debt makes a huge difference!


Pay off credit quickly—sometimes it makes sense to use credit.  Maybe you get a store discount for using their store credit card—and that can actually save you money, but only if you take advantage of the savings and pay the bill off as soon as it arrives next month.


Don’t buy gifts that people don’t want—this one gets a bit tricky, but let me explain what I mean.  Have you ever opened a gift and had to try to grin and say thank you when you have no idea what it is?  Perhaps you received a gift, like a $30 canister of gourmet popcorn and thought, “I would have rather had the money that was spent on that instead.”  You know, the nice gift that you really didn’t need or want.  The one that may never be used… I think that we’ve all received them, and probably even given them.  So this year, if you aren’t sure about what to buy, give something that is more meaningful… and here are a few ideas:


  • For new parents or parents of toddlers—offer babysitting as your gift.  Seriously, any new parent or parent of a toddler knows that free babysitting is pure GOLD.  I guarantee they will love this gift!
  • For grandparents— make a keepsake ornament from the kids.  Grandparents love anything that is made by their grandchildren, so whether it’s a handprint ornament, craft, or special card, it will be way more meaningful that then sweatshirt that says “World’s Best Grandpa.”  I’ll let you in on a secret: No one really wants to wear these shirts.  Ever.
  • For mom and dad—dad doesn’t need another tie, and mom doesn’t want kitchen utensils.  They probably just want some extra time with you.  So, instead of spending money on something that they don’t really need, invite mom out to lunch just because, make time to go on that hunting trip with dad that you have been too busy to take… they will appreciate this much more…
  • For your kids—as parents we want to make sure that our kids have a HUGE pile of gifts to open.  Because what is better than the joy on their faces and they run downstairs on Christmas morning to see all the wonderful packages that Santa left?!  But, we all know that joy only lasts as long as there are more gifts to tear open and when the dust settles, the kids play with their new loot for about 5 minutes and then life goes back to normal—and all those big bucks you spent to fulfil every Christmas list wish are seemingly wasted… talk to your kids about the true meaning of Christmas and find a way to have them learn the joy of giving… that will last for them a lot longer than getting the hottest, most expensive toy of the season…


Just because it seems like everyone around you is giving and receiving the latest and greatest gifts this season, based on the recent Holiday Spending Survey, they may very well be going into debt to do so.


Check out one of my posts, 10 Ways to Avoid Overspending This Year for Christmas and find out even more ways to get the perfect gift without overspending and going into debt.

10 Ways to Avoid Overspending this Christmas | Money Savvy Living

Major Credit Card Changes are Coming, October 2015

Major Credit Card Changes Coming | Money Savvy Living

Major changes are coming to a store—and wallet—near you this fall.

It is something that you do several times a week and probably don’t even think about it. You go to the store and upon paying for your goods, swipe your credit card and then sign at the terminal. But soon, this will be a thing of the past.


Starting in October 2015, a big change-over is coming to stores nationwide—and to your very own wallet. Swipe-and-sign credit card terminals will be replaced with new terminals, chip-and-PIN, which you will insert your credit card into for a chip to provide information and can enter a PIN for verification—as opposed to swiping the magnetic strip and signing. You are probably already familiar with this process if you have ever used your bank card at the ATM: insert your card and enter your PIN number to complete the transaction.


So why are credit card companies making this widespread switch?

There are a couple of benefits to switching to this new chip-and-PIN system, known as EMV:


Operates Offline—while being able to access information from both credit card and bank to authorize an expedient transaction is not a problem in the U.S. as it has been in other parts of the world, it does offer a way to process the transaction independent of this type of communication.

Digital Seal

A transaction-unique digital signature in the chip proves its authenticity in an offline location and averts criminals from using fraudulent cards 


Reduce Fraud—many markets around the world have already switched to this system in order to reduce fraud, which has actually had the effect of rising fraud here in the U.S. Whether being used as EMV Contact or Contactless, the payment chip cards hold an embedded microchip, which is a type of small computer that provides robust security features and other capabilities not possible with magnetic stripe cards.

EMV Contact

You may have noticed a metallic square on the front of some of your current credit cards; this is used for an EMV contact card is known as the card’s contact plate. A microchip is embedded in a small cavity directly behind the contact plate, protected by a thin resin capsule. When inserted into a card acceptance device, such as a terminal, the contact plate allows the chip to connect to a reader. This connection enables the chip to get power from and exchange data with the terminal.

EMV Contactless

Contactless EMV works by holding a contactless, chip-enabled payment device, such as a credit card or smartphone, within proximity of a contactless-capable reader. The reader activates the chip embedded in the card and allows exchange of data via radio frequency without the payment device ever leaving the customer’s possession.

Major Credit Card Changes | Money Savvy Livng 

What is important about the October 2015 deadline?

For the consumer, there is not really anything important about the October 2015 deadline, except for the fact that the process will change and you will probably receive new credit cards in the mail by that time. At least initially, consumers will still be able to sign for purchases if your bank has not chosen to issue cards that require PINs because PINs will not be required as of October 2015.


The Liability Shift


Part of the October 2015 deadline in our roadmap is what’s known as the ‘liability shift.’ Whenever card fraud happens, we need to determine who is liable for the costs. When the liability shift happens, what will change is that if there is an incidence of card fraud, whichever party has the lesser technology will bear the liability.


If a merchant is still using the old system, they can still run a transaction, using a swipe and a signature; however, they will be liable for any fraudulent transactions if the customer has received and is using a chip card. And vice versa—if the merchant has a new terminal, but the bank hasn’t issued a chip-and-PIN card to the customer, the bank would be liable.


The main purpose of a liability shift is not merely to shift liability around the market. Its purpose is to provide incentive to create coordination in the market, so you have issuers and merchants investing in the migration at the same time. In theory, fraud is not necessarily shifting around within the system, but being driven out of the system.


Some merchants already have the new terminals in place, so be on the lookout over the next few months for these subtle, yet major, changes in the way in which you can pay for goods and services.

How to Get Debt Free: 5 Easy Ways to Get Rid of Credit Card Debt



If you are among the average American household, you probably have around $7100 in credit card debt. Credit card debt can be overwhelming because no matter how much you pay, it seems like the debt just never goes down. Credit cards are a revolving type of debt, which means that the interest compounds daily. So when you wake up tomorrow, you will have a higher balance than when you went to bed last night. Credit cards also typically have high rates of interest, with the average credit card rate being around 12%; however, many credit cards have rates well over 20%.

While the Credit Card Accountability Responsibility and Disclosure Act of 2009, or CARD Act, does limit interest rates and fees that companies can charge, it still may not be as easy as you would think to pay off those balances.
There are a few things that you can do, within your current budget to work toward getting debt free:

Pay your bills on time.  Even if you are only a day late, credit card companies will charge you a $25-35 late fee, which will be added on to your bill total.  Remember, anything that goes onto your account, whether a new purchase or a late fee, interest is accruing daily.

Pay more than the minimum payment amount.  If you are just making the minimum payment, many times, you are only paying the interest that accrued that month.  Anything extra that you can pay goes toward the principle balance and will reduce the compounding effects of the interest.

Pay down higher interest rate cards first.  Getting rid of the higher interest rate cards first will free up more of you money each month to pay down other debts.  Keep in mind that store credit cards usually have higher interest rates.  Using a store card to take advantage of a discount or coupon can actually be a great way to save money, but make sure you are paying off those higher rate store cards each month.

Pay off cards with low balances and higher payments first.  If you have a credit card that has a $1000 balance and a $50 per month minimum payment and a card with a $2000 balance and a $50 per month payment, make sure to pay off the one with the $1000 balance first.  In the first scenario, the payment to balance ratio is 5% and the second scenario, the ratio is 2.5%, so getting rid of the smaller balance, with the relatively higher payment will free up more money to put towards paying off another debt.

Limit credit card use.  If you truly want to get out of under the pile of debt that is on your credit cards currently, you need to limit credit card use, or stop using them altogether.  It is much easier to overspend each month if you are using credit cards because you don’t feel the pinch of how much was spent until the credit card statement shows up and it’s time to pay your bill.  Try to use cash as much as possible because you can’t overspend when you only have so much money set aside for groceries, gas, or other household items.

Getting debt free: paying off credit cards