Seeking out a debt-free new year

By Jason E. Silvers

Herald-Tribune

Fort Scott, Kan. -- Feeling a little light in the checkbook? Sitting at home cutting up credit cards? After Christmas, millions of Americans who overspent during the holiday season may be singing the post-holiday blues.

Del Potter, a local credit counselor, offers some advice for people who may have exceeded their financial limits this year.

"Credit card debt is the highest," Potter said. "Some of these APR's are unreal. It's monumental, staggering. People never pay them back because of the high interest rates," he said.

Potter, who has worked as a credit counselor for the last 15 years, said the best advice he can give people suffering from credit card debt or holiday overspending is to set up a Christmas Club benefit account with any of several local financial or credit institutions.

Christmas Club accounts are interest bearing savings accounts designed to help a person save for the holiday season.

People who take advantage of a Christmas Club account may deposit money monthly into the account and will not be charged interest, however money in the account will earn interest over time, Potter said.

The money then stays in the account, typically until November, and the bank then sends the person a check for the existing balance, which the person can then use for holiday spending, he said.

"A lot of people can't save like they should. This lets people take control and put their money into a savings account rather than slaving over paying high interest rates," Potter said.

Many businesses will also let employees deduct a certain amount of money from their paychecks that is automatically deposited into the Christmas Club account, Potter said. Small fees could possibly be charged for withdrawing money from the account too early.

There has been a positive response from Potter's clients who use Christmas Club accounts, he said.

"They love it. I have clients who look forward to that check right before the holidays," Potter said.

Other tips Potter mentioned include setting goals for spending by creating a budget and dividing expenses over a 12-month period.

People may also go to their bank and set up a chosen amount of money to spend before the holiday season arrives, Potter said.