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Holiday spending hits pocketbooks hard |
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December 15, 2004 |
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By GWEN MICKELSON
Sentinel staff writer |
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Tom Gretsch used to spend nearly $3,000 on gifts every holiday season.
The San Mateo tool salesman, 51, was like many Americans who overextend themselves during the holidays and are slammed with credit card hangover when the season's over.
"There was nothing I couldn't afford — I had tons of plastic," quipped Gretsch. "So it's possible to go out last-minute and get something thoughtless and overpriced and insincere and very expensive."
Gretsch did this for Christmas, anniversaries and birthdays.
"The thought behind it always seemed to be, ‘It's only a few dollars a month more, and what's a few dollars when I can be a hero,' " he said.
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| Loaded down with presents, holiday shoppers hustle up Pacific Avenue in downtown Santa Cruz. (Dan Coyro / Sentinel) |
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Gretsch spent himself into a more than $40,000 credit card hole that caused him to declare bankruptcy in 1992. But between 1998 and 2002, he once again built up $32,000 in credit card debt.
"This time I just went, ‘No. Whatever it takes, it takes, and I'm willing to do it,' " said Gretsch, who sought help from the nonprofit Consumer Credit Counseling Service based in Camarillo, which has an office in San Jose. |
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Present danger
During the 2003 holiday shopping season, Americans racked up more than $115 billion in retail spending on credit and debit cards, according to Cardweb.com, a payment card information network. During the second quarter of 2004, about 4 percent of credit card accounts were delinquent — nearly 50 million of the 1.2 billion cards in circulation.
About 1.6 million Americans declared bankruptcy last year, according to Brad Strohe, co-chief executive officer of San Mateo-based Freedom Debt Relief, a consumer debt resolution service.
"I think a big catalyst for problems ends up with the holiday season," Strohe said. "Culturally and combined with all the marketing, people throw caution to the wind and have less personal guilt about spending because it's not on themselves."
Strohe said the primary problem is lack of budgeting.
"So our recommendation is to set a limit for a maximum amount you're going to spend, without regard for how many presents, who you're buying for and for what purpose," Strohe said. ‘Then make a list for the people you need to shop for and allocate how you're going to spend your original budget." |
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Shoppers getting some holiday buying done in downtown Santa Cruz in early December appeared to be managing their money more or less carefully around the holiday season. They all said they didn't make a holiday budget, but they had decided what they would spend on each gift recipient before they went shopping. Many allowed the actual amount they spent to be flexible, regardless of their predetermined target.
"You feel special
when you have something new, and you feel good when
you give something nice to someone," said Verona
Ross of Menlo Park, an information technology manager
at Seagate Technology in Scotts Valley.
Click
here to go to Freedom Debt Relief's website |
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