Are Holiday Credit Cards a Trap?

We’re diving into the nitty-gritty of credit card debt today. Are Holiday Credit Cards a Trap? Did you know about 42% of adults are rolling with credit card debt month after month? Yeah, that’s a hefty number, especially when we get into the holiday shopping hustle. We’re breaking down how those shiny 0% financing offers can end up chaining you to debt longer than you’d like. So, if you’ve ever wondered why you’re still paying off Christmas gifts in the spring, you’re not alone, and we’ve got some tips to help you dodge that trap. Let’s chat about turning your spending habits around and finding that sweet peace of mind when it comes to your finances.

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The podcast dives into the nitty-gritty of holiday spending and credit card debt, and let me tell you, it’s a real eye-opener. Picture this: 42% of adults are toting around credit card debt like it’s a designer handbag. Ouch! And it gets juicier. About 30% of shoppers are lured by those oh-so-tempting 0% financing deals, thinking they’re scoring a sweet deal. But spoiler alert: half of them end up not paying off their balance before the promo ends. That’s like eating a whole pizza and wondering why you’ve got a belly ache. The hosts share personal anecdotes that hit home—like the time one of them thought using a credit card for convenience during the holidays was a smart move, only to be stuck paying for Christmas long after the New Year’s confetti has settled. They remind us that credit cards are often sold as the ultimate convenience, but they can really turn into chains if we’re not careful. So, what’s the takeaway? Keep your eyes peeled for those rewards that aren't as free as they seem, and remember, debt can rob you of your peace. It’s all about making conscious choices this holiday season!

Takeaways:

• About 42% of adults juggle credit card debt month to month, which is a pretty hefty number.
• Holiday shoppers love those 0% promotional financing offers, but they can lead to debt traps.
• The median time to pay off holiday debt is six to eight months, which can feel like forever.
• Credit cards promise convenience but often deliver regret and financial chains instead.
• If you think rewards are free, think again; they can cost you big time in interest.
• Debt steals your peace, making it hard to enjoy the holidays without worrying about money later.

Links referenced in this episode:

• financiallyconfidentchristian.com/contact

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Episode Transcript

(00:28):
Listen to this. About 42% ofadults carry credit card debt month
to month. Roughly 30% ofholiday shoppers choose to pick the
0% promotional financingoffers. You see them everywhere whenever
you're shopping. 50% of thoseusing those promos. Here's the problem
with that. They don't pay offthe balance before the promo ends.

(00:48):
When carried debt, the medianpayoff time for holiday debt is six
to eight months. And listen tothis. The average interest paid by
spring, you ready for this? Isroughly $700 to $1,000. And the median
holiday balance carried pastthe season is about $1,200 to $1,500.

(01:09):
Which leads us to today'squestion. I got this one in. I said
we got to talk about this ontoday's show. Ralph. I always tell
myself I'll just use my creditcard for convenience during the holidays.
But somehow I end up payingfor Christmas until spring. What,
what am I doing wrong? Ralph?Here's the truth. Credit cards promise
convenience. That's what theydo. But the problem is oftentimes

(01:30):
they deliver chains. Let'stalk about the truth behind those
holiday rewards and easypayments and credit card debt on
today's show.
This is Financially ConfidentChristian, your daily dose of gospel
grounded insight and faithdriven tips to help you break the
cycle of financial shame with confidence.

(01:51):
Welcome to the show. I'mRalph. I'm a business coach and my
goal every day is to help youbreak that cycle of financial shame
and do it with confidence. Andunfortunately in my accounting practice,
working with individuals andsmall business people, I've seen
how credit traps us into, intowhat we think is a reward, but it
just traps us. And I've beenthere too. I think about how many

(02:13):
credit card offers and buy nowand pay later things. I'm going to
earn those points. I'm goingto make a this is going to be such
a good deal. I can buy thisnow. I don't have to pay for it for
later. And the promise for somany of us and me included, I've
got the laser focused on metoday. It actually brings buying
pressure and regret. So I'mgoing to tell you right now, here's
my warning. I don't usuallygive you a warning at the beginning,

(02:34):
but watch those rewards deals.Let me tell you about this client.
I had this client, she wassuper excited about this cash back
for using her credit card. Shesaid, Ralph, I'm going to take this
credit card, man. I'm going touse it for everything this holiday.
And she came in to see me toget her text. And she said, ralph,
you're never going to believethis. And she was asking me about
this because she wanted toknow if this was taxable, but she
had made $400 in cash backjust from our holiday spending. And

(02:59):
I said, that's fantastic. Thatis great. And then I said, okay,
well, how did that play out?She goes, well, the problem is this.
I spent a lot of money duringthe holidays, Ralph, and I really
wasn't able to pay it off. AndI said, well, there's a problem there,
isn't it? And I said, do youhave your credit card statement?
She pulled it up on her phone.I said, let's go look at this statement
because it's cool. You made$400 back. I wanted to find out what

(03:20):
credit card she had, how shewas able to do this. Well, first
of all, I looked at how muchshe spent. I was like, wow, you certainly
have a big holiday budget. Shegoes, well, you know, I got an increase
on my credit card. They gaveme more money to spend. It's like.
So I just charged it up And Imade $400, Ralph. I said, yeah, but
here's the problem. You paid$1,000 in interest just through March,

(03:41):
and you're still not able topay that credit off yet. There's
a problem here. Which leads meto a quote from Dave Ramsey. I don't
always agree with David, man.He is right here on this one, 100%.
Now, I do not take the samestrong stance that he takes that
never use credit cards. Butthis is what he said. He says, credit
cards are like snakes. Playwith them long enough and you'll

(04:01):
get bit. So let me ask youright now, as you're listening or
watching to this, have yougotten bit? It's not fun when you
get bit. Which leads me tothis. I have a special call to action
right now. If you've got astory to tell, something about credit
or something about finance,Christian finance, I would love to
hear your story. I would loveto hear your journey. I'd like to

(04:22):
hear how we've gone fromfinancial regret to financial confidence.
Maybe your story could inspireothers and make a difference. If
you've got a story you'd liketo share, here's what I want you
to do. Go right tofinanciallyconfidentchristian.com contact
again. You can tell us what'sgoing on. Share your story. Hey,
we may even have you on theshow in a future episode. Go to financiallyconfidentchristian.com

(04:43):
contact. Well, let's get Backto our show today. Let's restate
the question because this is agreat question from a listener. How
do I avoid credit cardrewards? Trap. And it's really a
trap, isn't it? So first thingI want you to remember, rewards aren't
free. See, here's the thingyou got to understand. Credit card
companies make money based oninterest. They're not making money
on the points they give you.They count on you messing up. They

(05:06):
count on you slipping thosebuy now, pay later things. They're
wonderfully profitable for thebanks to do those because they know
most people won't pay it off.Now listen, if you're one of those
people that can pay it off,like my wife and I, we bought a new
bed and they had this seamlesscash offer for three years, I'm going
to pay it off. But if youdon't have the regimen to do that,
and I'm not calling you, I'mnot judging you, but the banks encourage

(05:29):
you to not pay it off in time.So, number one, remember, nothing
is free in life. Rewardsaren't free either. Number two thing,
debt steals your peace. Soyou'll never be able to celebrate
freely when you owe for itlater. Because so many people, and
if I'm being honest, I wasstuck in that cycle of debt for so
long. And it just lasts, andit lasts and it lasts. We talked

(05:52):
about that statistic at thebeginning. People are going into
this holiday season stillpaying off. This is a sad thing to
say, several years worth ofholiday debt. So remember that debt
steals your piece. Anotherthing I want to encourage you to
do, it's all about awareness,really. Right? So track your spending
this holiday season. We'vetalked about this a little bit on
the show already. Use an app,use a notebook. Every time you swipe

(06:14):
that credit card, think aboutit like this. So one of the things
that my oldest son does, everytime he swipes that credit card,
in his mind, he thinks, I gotto take that money out of my checking
account. He's using the cardfor the rewards, which is fantastic.
He does a great job with that.He's using it for the convenience,
but once a week he pays thatcredit card back. Maybe that doesn't

(06:35):
work for you. Maybe you don'thave the regimen to do that. I'm
no judgment here, but if youcan do it, then consider that withdrawal.
If it doesn't work for you,then think about an envelope system.
Here's how much I'm going tospend during the holidays. Put it
in an envelope. And once it'sgone, it's gone. Or. And I'm not
a big fan of debit cards, butif you're struggling with debt, this
is a great time to use a debitcard. Which leads me to the next
thing. Debit cards and cashreally helped us because I truly

(06:59):
believe psychologically, whenyou see that money leave your hand,
man, I remember as a kid,like, I get a couple bucks for Christmas,
you know, this woman, gimmethis and I'll tell you. It was easy
to spend mom and dad's money,but man, when I was taking that money
out of my own pocket andpassing that $10 bill or that, I
was like kidding me. Fivedollar bill across me, I was like,
wait a minute, it makes youthink twice. Well, as an adult, you

(07:19):
think the same way. Anotherencouragement I want to give you,
pay it off. If you alreadyhave a balance, that's okay. Create
a 60 day payoff plan. Don'tlet that interest continue to linger.
That cycle is just going tobury you deeper and deeper. So if
you've got a balance, let'stalk about how to pay it off. I've
got a ton of shows on thewebsite to talk about how to break

(07:41):
that cycle of financial shame,especially credit card shame. Because
as Dave said, they're likesnakes. And when you get bit, they
leave that venom. And thatvenom hurts for a long time. Which
leads me to today's Bibleverse. And this is kind of a harsh
one, but I got to share itwith you out of love. Proverbs 22:7.
The rich rule over the poorand the borrower is slave to the
lender. If you've listened tomy show for any length of time, you

(08:02):
know Ralph loves this Bibleverse. I don't love this Bible verse,
but it speaks truth. And thisis so true. If you are continuously
in debt, you are a slave tothose lenders. And that's how lenders
make money. They're doing aservice. I get it. I'm a capitalist.
I believe in the free market.But understand that's their goal.

(08:23):
When you see those promooffers, we offer this much in credit
card rewards. Just understand,if you play their game, you might
get bit. You got to have theregiment not to do that. Well, how
about we pray right now, Lord,right now. We don't want to get bit
by that snake of credit carddebt. So we ask you to give us discipline
right now. Give us wisdom touse credit. And Lord, if we're one

(08:43):
of those folks that can't doit, give us the understanding of
how to do it better because wewant to desire freedom more than
those rewards, Lord. And teachus, Lord, to live within our means.
You provided for us. Youdidn't say you're going to give us
comfort, Lord, but you saidyou'd give us provision. So help
us to embrace that. Help us tofind contentment in that and help
us to really have that freedomand discipline and wisdom when we

(09:05):
look at the joy of theholidays and not going broken. And
we ask this with confidence inthe name of Jesus, Amen. All right,
so here's your one action itemfor today. I want you to just think
about one holiday purchase.I'm not asking you to do much, just
one holiday purchase andswitch that from credit to debit
or maybe even cash this weekand feel that freedom that comes

(09:26):
with control of doing that.And again, if you've got a story
for the show, I would love tohear it. Your story might very well
be featured on the show again.You can get to us by going to financially
confidentchristian.com/contact. I
would love to hear. It's whatgrows the show and and I love hearing
from my listeners. So thankyou for joining me today. Remember,
holiday shopping can betempting. There's a lot of joy in

(09:47):
that. But stay mindful of yourfinancial well being at the same
time and pledge today you'regoing to switch one holiday purchase
to cash or debit this week andembrace the peace of mind that comes
with control. We talked aboutit yesterday. Build that intentional
holiday spending plan. So goout there today and be a financially
confident Christian. I haveconfidence in you. Have some confidence

(10:07):
in yourself. Stay financiallysavvy. God bless you. And you have
a great day today.