Caution Urged as Online Spending Predicted to Soar

More consumers will be logging on and charging up this holiday season according to industry analysts. Online holiday sales are projected to top $17 billion, an increase of 21 percent over last year.

This increase in online spending has credit counselors concerned, as non-mortgage consumer debt across the nation was more than $1.9 trillion at the end of the third quarter. "This is not good news for consumers, with the holidays right around the corner," said Kim Womack of Consumer Credit Counseling Service (CCCS). "While convenient, online shopping requires credit cards. A click here and a click there and before they know it, they've spent hundreds, if not thousands of dollars," said Womack, director of education.

CCCS of South Texas urges consumers to charge with caution this holiday season, especially those already struggling to pay credit card bills. CCCS is a nonprofit, community service organization that provides confidential counseling, guidance, debt management and education programs to financially troubled consumers. When spending online, CCCS offers the following tips:

1. Develop a holiday spending plan. In addition to gifts, don't forget entertaining, greeting cards, postage and travel expenses. Before you go shopping, decide what you need to buy for the holidays and how much you can afford to spend. This is your holiday spending plan and stick to it. ''' 2. Make a gift list.''' Decide who you'll buy for this year and how much you're going to spend on those gifts. Keep the list with you so you can take advantage of bargains. Also keep accurate records of what you spend on each person. ''' 3. Pay as you go.''' The best way to avoid huge interest payments and post holiday bills is to pay cash for items as you buy them. If you need time to save up for a major purchase, ask about a no-interest layaway program.

4. Create a credit card ledger. Tally each credit card purchase to monitor total spending. Stick to your budget.

5. Use credit cards responsibly. When using a credit card to make an online purchase, be sure to pay off the bill in the interest-free period. Always use the card with the lowest interest rate just in case you have to carry a balance. Don't open accounts just to get discounts on holiday purchases from retailers.

6. Stop when you're done. When you've bought everything on your lists, turn off the Internet and back away. Buying something you don't need at a good price is no bargain. Instead, wait for post-holiday clearance sales. ''' 7. Get budgeting help if necessary.''' CCCS recommends that consumers spend no more than 1.5 percent of annual income on holiday gifts. This means that a family earning $30,000 a year should spend about $450 on gifts. For help with setting and keeping a holiday budget, CCCS has holiday educational materials and consumer tools available. Counseling can also help shoppers establish a plan for purchases and paying off holiday debts.

CCCS of South Texas is a nonprofit, United Way agency and a member of the National Foundation for Credit Counseling (NFCC). CCCS has been providing free counseling and educational services in the South Texas area since 1969. The agency also offers low-cost repayment plans for severely indebted families on the verge of bankruptcy. CCCS has numerous offices in the Crossroads, Coastal Bend and Rio Grande Valley areas. For more information, call 800-333-4357 or visit www.cccsstx.org.