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Will December Credit Card Spending Bring January Remorse?





While Frank Sinatra may have crooned about having a "merry little Christmas," retailers estimate many consumers may be planning a merry large Christmas with respect to holiday shopping.

The National Retail Federation forecasts holiday spending will see a 4.1 percent bump this year to a total of $586.1 billion. That's an average of $749.51 per holiday shopper.

Meanwhile, a recent analysis from TransUnion finds credit card debt and delinquencies are on the rise. Although the increase correlates with a pattern from 2011 in which credit card debt increased and then decreased, should the upward trend continue, it may indicate trouble for those planning to use plastic to fund this year's festivities.

Joy in December, regret in January?

Unfortunately, many shoppers may end up overspending. According to a survey from Oxygen Media, 47 percent of adults say they have spent more than they could afford for the holidays. In addition, 36 percent report going into credit card debt to finance their gift giving.

Those numbers may be worrisome in light of the recent TransUnion report, which found credit card debt and delinquencies rose in the third quarter of 2012. The delinquency rate -- which tracks the percentage of borrowers more than 90 days late on their accounts -- rose to 0.75 percent in the third quarter.

Credit card debt also climbed 4.91 percent from the previous year. The average debt per borrower now stands at $4,996. While 2011 debt statistics saw a similar increase in debt and delinquencies followed by a decline, the numbers could continue to rise if consumers overextend their wallets this holiday season.

Keeping credit card spending in check

While some consumers prefer to use credit cards for their convenience or to earn rewards, paying with plastic can make it easy for shoppers to lose track of their budget.

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