Credit cards and Halloween. What could possibly go wrong?
Ah, Halloween. Which is your favorite bit? Is it the excitement of planning your little goblin's trick-or-treat route, and the frequent references to your local sex offender database that such an operation nowadays requires? Or is it the reattachment of your finger tip, necessitated by the excavation of a particularly paunchy pumpkin?
Or perhaps it's the goodnight kiss in your kid's bedroom when it's all over, made only slightly less sweet by the knowledge that a candy-induced sugar rush on top of a monster-induced adrenaline rush is likely to mean that it will be some time before the sandman can get to work.
Time to resurrect your credit cards?
The sandman might also take his sweet time when your own head hits the pillow. You may not be disturbed by the ghouls, ghosts and impossibly gorgeous vampires that occupy kids' imaginations. But the horrors you face are just as terrifying.
Thanksgiving is just around the corner, immediately followed by Black Friday. And, from that moment on, your chances of finding the time and the money needed to get through the holiday season without racking up more credit card debt may be scaring the daylights out of you.
Yes, you've probably been through this before, and, yes, your mom and dad probably faced the same worries a generation ago. But this year the whole thing may be even more scary than usual.
Six days before Halloween, the Conference Board published its Consumer Confidence Index, and its findings made Halloween (the movie) look like a particularly bland episode of The Waltons. Americans are more worried about their financial futures now than they have been since the Great Recession.
So how should you react to the spending demands of the holiday season: by resurrecting, voodoo-style, your credit cards or by plunging, van Helsing-style, a stake through their little plastic hearts?
The credit card version of "trick or treat"
The answer to that question is likely to depend on your personal level of financial self-discipline. If you're one of those lucky people who can control their spending, then you're only hurting yourself by avoiding credit card use.
As the IndexCreditCards news blog observed last year in "7 ways in which credit cards beat debit cards," credit cards are, objectively and indisputably, the best payment medium for those who can manage them well. Indeed, their superiority has become even greater since that piece was written, as many new and existing rewards credit cards have become increasingly generous.
If, however, you're one of those people who see credit limits as goals to be reached as quickly as possible, then you may be wise to leave your cards locked away in the deep freeze at home. After all, if you find it impossible to resist temptation, carrying your own personal devil around in your wallet is probably a bad move, even on Oct. 31.
Credit card debt that comes back to haunt you
There's nothing wrong with a little credit card debt providing you can easily manage it, and can pay it down within a reasonable period. But let it get out of hand, and it's likely to come back to haunt you, and not just at Halloween.
Recently, Eric Gillespie, director of the Consumer Credit Counseling Service of Greater Greensboro, N.C., was a guest on a local CBS News affiliate, and offered some sound advice for spending over the holiday season. His suggestions included:
- Establish a firm budget for yourself now. Write a list of who you're going to buy gifts for and how much you're going to spend on each. Then stick to that budget.
- Find ways to cut down on other spending during November and December. Take your own sandwiches to work, cut down on trips to coffee shops, forgo your daily newspaper, turn off unnecessary lights, don't leave the TV on stand-by… the list is endless.
- Shop early. You're likely to find better bargains if you take time to check out all your options.
- Take advantage of sales, coupons, discounts and other offers, including those you can find online.
- Track your spending so that you can make sure you're sticking to your budget.
Rewards credit cards or low APR credit cards?
Choosing "witch" card to use for different purchases (pun intended, this is a Halloween special) can also help you through the holiday season. If you know that you're going to be able to pay in full for a transaction within the current billing cycle, then your best bet may be to use one of your rewards credit cards. More specifically, you might be best off using cash back credit cards, because you may find yourself short of folding money come January.
However, if you know you'll need to pay off some transactions over a number of months, you could do better using low interest credit cards. After all, you don't want to find yourself paying dearly in higher interest rates for the rewards you've earned. If you're unsure which is better, then check out our credit card calculators.
How to sleep peacefully on Halloween night
Just making a budget plan and resolving to stick to it can take a lot of the fear out of the financial horrors of the holiday season. Indeed, if you do so, you may well find that you fall asleep on Halloween night as easily as a sloth on ketamine.
Unfortunately, there's no guarantee that you won't be woken 10 minutes later when your little angel throws up a pound of trick-or-treat candy all over her quilt.
Published 10/28/11 (Modified 12/01/11)