Black Friday or Buy Nothing Day, which side are you on?
It's enough to make anyone scream, especially those of us opposed to taking on debt just so more Christmas presents can be bought. Christmas debt, as we've explained before, is one of the dumbest reasons to go into debt. Everyone you give gifts to will enjoy your generosity, but you won't when the bills start arriving.
And if that isn't enough to stop spending on Black Friday, remember that last year, Black Friday was a black eye on the world's financial markets. In what is normally a slow day on the stock market, the Dubai debt crisis was announced, sending markets into turmoil. If the owners of Dubai World can't keep their spending in check, shouldn't that be an omen for the rest of us?
There are better ways to spend Black Friday, whether you're shopping at the mall or online. At the other end of the consumer spectrum is Buy Nothing Day, which is Nov. 27 in the United Kingdom and Nov. 26 in the United States. The idea behind it is to highlight the environmental consequences of what people buy, and to spend 24 hours doing anything but buying stuff.
Spend the day at a park, go hiking, stay at home and read a book, play games with your kids -- anything but go shopping. If that's not enough to convince you to take a one-day break from shopping, no matter how good the sales are, think about the debt you'll ring up for the Christmas shopping season after Black Friday has ended.
As consumers gain more confidence about the economy, they're likely to spend more with their credit cards, which typically increases at Christmas. Run the numbers on a credit card payoff calculator, and you'll quickly see how scary the numbers can be. Paying off $1,000 at 14.36% interest will cost $89.96 every month for a year.
The average household debt with a credit card is $15,788. To pay that off in a year at 14.36% interest would require a monthly payoff of $1,420.33.
Following a budget and shopping online for deals is smart, if you can afford to pay off the credit card when the bill arrives. But if not, all the Black Friday deals in the world won't make paying off credit card debt any easier.
Aaron Crowe is a freelance journalist in the San Francisco Bay Area.