NFCC Warns Against Holiday Overspending
Black Enterprise Magazine July/August 2018 Issue

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You’re probably excited about all the deals you’ll get this season, but it’s important that you don’t go beyond your budget amidst all the holiday excitement. Just because something is on sale doesn’t mean you have to buy it. This is a sure way to dig your way into a huge debt hole.

Just in time for Black Friday, the National Foundation for Credit Counseling has released a list reminding you of the long-term consequences of overspending. If you have trouble staying within your budget, you might want to bring this list with you on Friday. Here’s the NFCC’s list of reminders:

  1. Overspending will result in additional interest. The NFCC notes that adding new debt to an existing debt load, one which cannot be paid in full when the bill arrives, equals paying a larger dollar amount of interest due to the higher outstanding balance.
  2. You will reduce future borrowing power. Charging purchases on your credit cards will increase your debt levels while decreasing the amount of credit currently available. This could result in being declined for applications for new lines of credit or loans. The higher your balances, the more lenders will see you as a credit risk.
  3. Your credit score will be lower. If you have excessive debt, you’ll most likely fall into the bad habits of paying late, skipping payments, and utilizing too much of your open credit. All of these behaviors can result in your credit score taking a hit. Says the NFCC, “In addition, applying for new lines of credit simply to save money on your  purchase will not only increase the temptation to spend, but will show as an inquiry on the credit report, potentially lowering the score.”

For more on this topic, see the article, NFCC Offers Tips for Covering Holiday Expenses.

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