It’s the holiday season, the biggest shopping season of the whole year.  It’s this time that many Americans end up with thousands of dollars in credit card debt they cant afford to pay back.  Here are some reasons to avoid using your credit card while shopping for the holidays.

If you have a debt on your credit card now, you will only be adding to it.  You will spend more money with a credit card because there is no physical sign telling you to stop spending.  Try to avoid using your credit card and use some cash you have put aside for holiday shopping.  You will pay more with a credit card as well because you pay interest on balances that you carry for more than a month.  Also, if you already had a balance on your card, you won’t get a grace period.  Interest will start adding up quickly.  The New Year will come and you will be paying off debt from the holiday season.  During the holiday season, there is also a much higher risk of credit card fraud.  Leave your credit card at home and reduce the risk of someone stealing your card while shopping.  In February 2010, a credit card rule will stop credit card companies from raising rates on already existing balances.  Banks still have around 60 days once holiday shopping ends to raise your rates before the new rules take effect.  You could be paying much more than you expected.  You could be spending more than you can afford.  When holiday shopping, it is difficult to keep a tab of what you are buying.

Many people willmax out their credit cards while holiday shopping.  You are now risking going over your credit limit once the finance charges kick in.  When a balance is over 10% to 20% of your credit limit, it has a negative impact on your credit score.

Buying more gifts than you can afford will only cause trouble for you in the near future.

Do not go shopping without a budget.  Going shopping without a limit will make it very easy to charge more than you can afford.  Before leaving your house to go shopping, you should figure out exactly how much you can afford to spend.

Once a budget is made, make sure to keep up with it.  Keep all of your receipts and check your account to make sure you are not spending too much every now and than.

Many are guilty of opening a new account just to get discounts.  Plenty of retail shops try to convince their customers to sign up for the store credit cards for better discounts on purchases.  You will be risking charging more than you can afford, in return affecting your credit score.

Never let someone else go holiday shopping with your credit card.  You won’t have any idea how much they are spending and if your card borrower does not pay, you will have to have extra money to pay for their balance.

Be careful not to leave your card somewhere while shopping.  Your credit card is targeted this time of the year more than ever.  Never let your cards get out of your sight.

If you are using your credit card to buy gifts because you don’t have cash chances are you can’t really afford the gifts anyway. If you don’t have money for gifts, don’t resort to credit. Instead, consider regifting items you’ve received or give homemade gifts.

Charging gifts for yourself because you “deserve” them.  It can be hard walking around the stores for weeks without getting anything for yourself. You’re going to see things you want to buy, but practice some self-discipline. Remember that while you’re out getting gifts for others, there are people out buying gifts for you.

Ignoring your post-holiday billing statement.  If you kept track of how much you spent, you can already guess that your first credit card billing statement will be higher than normal. Facing it sooner rather than later will help you get rid of that high balance sooner rather than later.

The longer you leave a debt problem the worse it gets and by facing your debts immediately, you’ll be out of your debt problem a whole lot sooner. There is a solution for everyone.  Here are a number of basic tips to get you started

Pay your priority debts first

Priority debts include council tax, TV license, fines, rent, mortgage, utilities bills, hire-purchase agreements, taxes and child maintenance.

Unsecured loans and credit cards are not priorities, so if you must default on any debt repayments then choose these. The fact is that they’re at the bottom of the pile when it comes to repaying debts, which is why they’re often the most aggressive about chasing you.

Be strong

You don’t have to take harassment from creditors. You are well protected in law. If you’re harassed, let them know that it is a criminal offence to demand repayment in a way that causes you or your family fear, distress or humiliation under Section 2 of the Protection from Harassment Act 1997. You can also report them to the Office of Fair Trading under Section 40 of the Administration of Justice Act 1970. Put this in writing.

Tell your friends you’re cutting back

Telling your friends about debts can be very hard, but it needn’t be. Most people have debts, and most have more than they let on. But if admitting debts is a step too far, you can still at least say that you need to cut right back on your entertainment budget. You can use any excuse: redundancy concerns, an unexpected bill, saving for a deposit on a house (or another house) or that you want to be able to save money to take advantage of low share prices.

Contact your creditors immediately

Always call your creditors before things go wrong, and before they contact you. If you promise to call them, call them on time, even if you have to tell them that you can’t afford to pay what you thought

Always attend court hearings

Remember that the law is there to protect you as well as your creditors. If you can’t afford to pay more than $1 per month then no judge will make you do so. You must be able to live, and you must be able to have some money for a little fun, too. Even judges recognize this!

Be totally truthful at all times

Always say what you really can afford. Don’t exaggerate or understate. It is in your interests to tell the truth to your creditors and to the court.

Millions of solutions to debt

There are an unbelievably high number of solutions to dealing with debt, but all most people think of is to consolidate, which is often a poor choice for them. If you’re unable to reduce your debts each month, you should seek help on the millions of ways to tackle your debts, and get a plan that is tailored specifically for you.

1. Pull together your paperwork

Rounding up and managing one’s paperwork is the dullest aspect of budgeting.  Without a grip on your paperwork, you have no power over your personal finances. So, get this task out of the way quickly by gathering together all of your statements, payslips and so on.

2. Set up a spreadsheet

Set up a list of all of your earnings and outgoings.

3. Learn to love your bills

Although no-one likes paying bills, they do have one useful function: they provide information about our spending habits. Thus, by keeping tabs on your bills, you can learn exactly where your money goes. However, before you can begin to bash your bills, you need to bring them together in one place.

It’s important not to overlook any of your daily, weekly, monthly and yearly spending. For example, don’t forget to track occasional bills, such as insurance policies which renew each year. Furthermore, don’t omit the little luxuries which get you through the working week. The most effective way to monitor your money is to keep a spending diary for at least a month. By recording all of your spending in a little notebook, you can build up an amazingly accurate picture of your financial habits.

4. Switch to autopilot

Budgeting is boring and it makes sense to automate as much of it as you possibly can. For example, paying bills by standing order or direct debit takes away the hassle of having to pay them as they come in. The same goes for saving.   Instead of saving whatever remains at the end of every month, it’s easier to set aside a fixed monthly amount to put away. By keeping things simple, you can switch to autopilot and thus avoid tiresome tasks.

5. Get help from others

Every one of us knows someone who has struggled financially in recent years. So, don’t be embarrassed to share your financial concerns with your loved ones, because they may be in the same boat!