Extension Report

Baldwin County Extension Office

302A Byrne Street

Bay Minette, AL  36507

Telephone (251) 937-7176 or

928-0860/943-5611 ext. 2222

FAX (251) 937-7285

Rick Zapata

Regional Extension Agent

Consumer Science & Personal Financial Management

December 15, 2009

Christmas Spending

Experts predict that this Christmas season, consumers will spend more money than ever using the internet as a shopping tool. Last season set new records of internet spending and this year more of the large retailers are targeting these internet shoppers with reduced bargains. During this recession, this means that there will be more competition than ever among these retailers which will help bring down prices. This is good news for shoppers who use debit cards to make these discount purchases, but for those who use their credit cards to make these purchases, it may not be such a good deal.

The danger when using a credit card to make Christmas purchases is always the same; “With credit you will always overspend”. This temptation is always the greatest when you find that “special something for that special person” on sale on the internet. If you sit down and do the math on your credit card purchase; the numbers just do not add up. You may not be saving any money; in fact you will probably lose the savings when you pay a higher interest charge. For instance, let us say that the item that you want is discounted 10 percent on the internet. If your credit card charges 29% interest, you automatically lose 19% of the value of the item. Now just use common sense, would you knowingly pay 19% more for an item, just for a present for someone?  If you have to pay shipping or sales tax for the purchase, this will add another cost that will reduce your savings.  Just because something is on sale, does not mean that you should buy it, especially if you have not paid for last year’s Christmas shopping on your credit cards.

The only way that you can save on an internet purchase on line is if you use your debit card and get free shipping. There are some internet sites such as Wal Mart that can ship to a local store for free. This is another way to save with the discount price on the item and free shipping. The closer we get to Christmas, the lower the prices will be. Last Christmas, the large retailers wound up with large quantities of inventory that they had to really discount to sell after the holidays. Expect this year to get the discounts before Christmas. You need to look for these bargains the actual week of Christmas. With the local store pick up, you may be able to save a bundle on some of your purchases.

The best way to shop for Christmas is to get a budget for your gifts and set a limit. Then leave your credit cards at home and when you are out of money that you budgeted, you are finished shopping.

Also, consider giving gifts that don’t cost money. You can always re-cycle things that you do not use anymore. Another great idea is to send someone special a recorded personal Christmas message on CD or DVD.  You could send them a history of your family or tell them things that you would want to pass on like an Ethical Will. These are special and personal messages for your family and friends that they will treasure forever. Just go to aces.edu and put in ethical wills or Google it and you can find instructions.  From all of us at your Alabama Cooperative Extension System, please spend wisely and have a great Christmas.

Email address: rrz0001@aces.edu

Phone: 937-7176 or 943-5611, 928-0860, ext. 2222

The Alabama Cooperative Extension System (Alabama A&M and Auburn Universities) in cooperation with the U.S. Department of Agriculture is an equal opportunity educator and employer.