Holiday Credit Crunch

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Story Published: Dec 3, 2008 at 6:48 PM PDT

By Melissa Wagner

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Holiday sales are in full swing and it seems there's a bargain around every corner. But sadly there are many still paying off last year's gifts while still spending heavily this year. Don't let it happen to your family. David Gilbreath with Consumer Credit Counseling Services says
"We have many clients who make six figure incomes and they're just spending 6 figure amounts of money." So are we in a recession? Shoppers spent seven-percent more this year compared to the last Thanksgiving weekend. And cyber Monday internet sales were up a whopping 15 percent. Does anyone see the doom and gloom on Wall Street? More Americans can't make their mortgage payments, car payments or even buy groceries. So where is all the money coming from? Plastic. Plastic in general isn't a bad thing. We use it for our drinking water, we also use it for our leftovers. And depending on what's in it, it can keep you healthy. But it's when you start turning to plastic cards and use more than what's in your checking account, that's when you can start feeling sick. Just ask Gilbreath. He's says there are a lot of financially unhealthy families in Yakima, "I think based on history, we'll see a lot of clients in January. People with credit card statements that are maxed out." He says even right now demand has never been higher. He's seeing a lot of people who don't understand a missed payment could sit on your credit score for seven-years. It could keep you from buying a house, or getting that job that pays more. He also warns against turning to a debt consolidation company, "Debt settlement is probably not a good option for most consumers. you end up hurting your credit in the long run." And you could still be forced to pay taxes on the amount you settled with the bank. But it's not too late to turn things around. Make a budget and stick to it. Pay with cash when you can. And if you need help, don't wait until it's too late. Get answers today.

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