Protect Yourself From Spending Too Much Money During the Holidays | Video

Alex Hagan | 11/26/2012

Black Friday has come and gone, but retail stores are still packed with shoppers. Customers will either use cash, debit or use credit to make those purchases. People are more inclined to use their charge cards during the holidays for gifts. However, that could lead to some financial problems down the road.

As shoppers continue to make their holiday purchases, they may end up using their credit cards more frequently. For Sonja and Tom Beck, that led to some financial troubles in the past.

"We got in trouble with a credit card, overspent and at the time, I wasn`t working and it was just hard to pay it back," Sonja said.

"If you can`t pay the balance off and you start looking at the interest all of the sudden. You don`t want to get to the point where you can`t even stand the interest," Tom said.

The average debt per borrower in the United States is around $5,000 and the average per household is more than $9,000. Financial experts say it usually takes around nine years to pay off a $1,000 purchase when only making minimum payments.

"There`s interest added on in which the rates are really high and they`re finding themselves only being able to make the minimum payment. When you`re making the minimum payment you`re probably paying double for that purchase by the time you get that purchase paid off," said Cindy Schaaf with Dakota Community Bank and Trust.

Schaaf says consumers should come up with a strategy and make sure they pay off their bill within three to four months after purchase.

"The best thing to do, we recommend is having a budget who you`re buying for and trying to follow that budget."

Meanwhile the Becks have a different strategy to prevent overspending.

"Just take cash money with and that seems to help because when there`s no more green in the wallet, you`re done," Tom said.

So far, that strategy is working out for them as they make it through another holiday season.

The average debt per borrower in North Dakota is just under $3,000, one of the lowest in the country.

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