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Surviving the Holiday Credit Card Crunch

Posted on in Bankruptcy

Although unexpected and unpaid medical bills remains the leading cause of all Chapter 7 bankruptcies filed in the U.S.today, credit card debt closely rivals as a strong contender.

For anyone contemplating consulting with a bankruptcy attorney within the coming New Year, the approaching holiday season may appear less than festive. As finances are already stretched, those with availability to credit cards may find themselves in a vicarious situation as the holiday season often entices shoppers into financial overindulgence.

About.com, an IAC company dedicated to assisting its online members with helpful advice, including personal finance, reminds those already in financial disarray to exhibit a measure of self-discipline to maintain a manageable limit when it comes to credit card purchases.

Even if you have not yet made the decision to petition for bankruptcy, the following insight to credit card purchases can benefit any holiday shopper.

Saying “Charge It”

Purchasing a gift on credit will ultimately cost more by adding months of costly finance charges, substantially increasing the original purchase price of the gift.

Falling Credit Scores

When spending totals more than 30 percent of an approved credit limit, credit scores considerably drop, affecting not only the numerical score but the overall credit report as well.

The Best of Intentions

When estimating a repayment plan, unexpected expenses, such as a major car repair, unforeseen medical bills or even loss of employment may not only postpone scheduled monthly payments but lengthen the term of credit card debt.

For those opting to petition for Chapter 7 bankruptcy protection as a means to discharge personal debt within the New Year, there are steps you can take for preparing for future debt free holiday seasons to ensure a fiscally fit holiday budget:

  • Pre-save holiday dollars or open a holiday fund account;
  • Devise a holiday shopping budget without over-extending;
  • Make a list to avoid impulse purchases;
  • Take advantage of layaway plans to lessen the financial burden;
  • Do not make personal purchases, limit gift-buying to those on the list;
  • Amazing deals are not always so amazing, shop wisely;
  • Take advantage of internet shopping to further avoid impulse buying; and
  • Venture out with only one credit card, setting a strict limit.

Preparing for the holiday shopping season can be financially challenging, especially for those experiencing financial difficulties but by practicing a measure of self-discipline, the holidays may seem a bit more manageable.

If you have questions regarding Chapter 7 bankruptcy and how the process may benefit your financial future, the experienced Arlington Heights bankruptcy attorneys of Newland & Newland, LLP can help. Contact our offices today for more information.

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