Avoid The Ghost of Christmas Past!!!
by Jim Garnett
ICFE Board of Education Advisors - The ICFE's Ask Mr.G on ICFE.info
The "Ghost of Christmas Past" is on the loose again this holiday season, and millions of Americans will have an encounter with him. He is an enemy, a robber, and a thief. He is virtually invisible as he blends in like one of our old family friends each season.

This "Ghost of Christmas Past" is the debt still owed on past Christmas(es) when yet another Christmas rolls around. If not detected and dealt with, he can literally suck the life out of a family's finances!

Each holiday season many families charge their Christmas expenses on credit cards and pay the minimum payment on the balance each month. As I will show you, this can take multiple years and thousands of dollars of interest to pay for just one Christmas, yet alone numerous Christmases.

So, let's "ghost-buster" this spook by following some simple steps:

1. Plan Your Christmas. Think about Christmas before it is upon you by setting aside money year round through a "Christmas Club", a special savings account, or by saving change in a bottle. Also shop for bargains in January for next Christmas.

2. Proportion Your Christmas. Your gifts should be proportioned by what you can afford, not by what you have access to buy. Most of us have access to much more credit than we can ever repay in a timely manner. Determine what you can afford by how much actual money, not plastic money, you can spend toward Christmas.

3. Pay For Your Christmas. Christmas's charged on credit cards can easily "haunt" us for years to come. Consider that the average amount charged on credit cards for Christmas is around $1000 per family. If 2% minimum payments are made toward that debt at 12% interest, it will take over 8 years to repay it with an additional $545 interest charged. That means your kindergartener's Christmas won't be paid off until she graduates from 8th grade! That means her Christmas presents were long gone before they were actually paid for.

And that is only one Christmas. Often Christmas debt is "layered" year after year! It is much better to simply pay for your Christmas each year within the boundaries of what you can actually afford.

4. Personalize Your Christmas. Why not put some real thought into this Christmas and make something instead of buy something. Gifts like baked goods, handmade ornaments, or even pictures of the kids give your Christmas the personal touch. You will substitute labor and creativity for cost, and your gifts will be just as, if not more so, appreciated.

Things You Should Know About Holiday Gift Cards
by Paul Richard, RFC
Another alert goes to purchasers of gift cards. Not all of them are created equal - some expire - and consumers are being caught unaware of the charges and fees connected with gift cards, especially those that aren't spent right away.

According to surveys conducted by retail merchant association some 53 percent of surveyed individuals indicated they would be purchasing gift cards from one or more merchants this gift giving season. The main reason is convenience and not having to visit so many stores.

The cards are being marketed as a gift giver's dream because they are easy to hold on to and in most instances, balances may be added to, however buyer beware because almost all gift cards come with fees, some with user limitations and most, but not all, do eventually expire.

Some of the other fees involved include, but are not limited to: purchase or issuance fees, inactivity fees and replacement fees. The inactivity fees, usually begin at the end of an 18-24 month period, with most gift cards begin assessing fees of $1.50 to $2 per month, taken from the balance of the card until there is either no balance or the expiration date has been reached. Consumers thinking about gift cards as part of their holiday giving are encouraged to ask questions and read the fine print. Also emphasize to the recipient that the card should be used promptly because of non-use fees and an expiration date. For example, a J. C. Penny gift card must be used in 12 months from date of purchase or a $1 per month fee is accessed after the 12th month.

Gift cards are not the same as paper gift certificates, which have a set dollar amount and rarely an expiration date. Many states have laws on their books requiring retailers to track gift certificates and turn the money over to a state fund, if the certificates are not used within a certain time period. Gift cards are also subject to theft. It is rare when an ID required to use a gift card, so thieves find them very appealing. In some states, the most a consumer can lose on a stolen gift card is limited to $50 after it's reported. However if the thief spends some of it before its discovered lost or stolen, the money spent by the thief if usually not recoverable through the merchant.