If you are anything like me you have done two things this holiday season that may spell doom for you in 2008.  The first is you waited to the last minute to holiday shop and now have nothing but fruit cakes and Christmas Tree air fresheners to give to your loved ones as gifts this year (something they will certainly remember in 2008).  And second, you probably bought the offending fruit cakes and air fresheners on a credit card since you didn’t have the money to buy them in the first place.

According to a recent Associated Press analysis of credit card debt from October and November, the value of accounts at least 30 days late jumped 26% to $17.3 billion in October compared to a year earlier. And some of the nation’s biggest lenders report increases of 50% or more in the value of accounts that were at least 90 days delinquent when compared with the same period a year ago.

For most of us who relied on our favorite plastic shopping companion to fill out our Christmas lists this year that means record balances to look forward to in the New Year.  Record balances that due to mounting mortgage expenses, a weakening job market nationally and 2005 changes to the bankruptcy law (making it more difficult to eliminate consumer credit card debt), may make it almost impossible for consumers to keep on top of it in the months to come.

So what’s the average consumer with $1000’s in credit card debt to do in 2008?  Consider these five suggestions to get your debt under control in the New Year:

1. Stop Using the Cards - seems simple enough? Stop using the cards now and put a kibosh on accumulating more debt on top of the debt you couldn’t afford in the first place. Put the cards away, cut them up completely or make a promise to yourself that they will only be used again in the event of an emergency. And no, new shoes does not an emergency make.
2. Pay more then the minimum - Let’s say you are $5,000 in credit card debt with a 16% interest rate and a minimum monthly payment of $110. Did you know that just paying the minimum means it takes 25 years to pay off your debt and by the way, that $5000 debt ended up costing you $12,000 in total factoring in that extra $7,000 you just paid in interest. Yet DOUBLE your minimum payment to $210 and pay off the card in 28 months, saving you about $6,100 in interest. (more…)

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With holiday spending in full swing so is its evil stepsister, credit card spending.  Recent stats by the National Retail Federation show that the 2007 holiday season is off to a record start with recent “Black Friday” sales by US shoppers rising 8.3% to a record $10.3 billion.  Figures for the following “Cyber Monday” shopping holiday, the Monday following Thanksgiving, also showed a healthy increase with a new one-day record of over $700 million in total purchases.

Unfortunately, most of this record consumer spending was paid through the use of credit cards.  Most consumers don’t hesitate to place $300 in goods on a credit card but certainly would think twice if they were forced to purchase the same amount of goods solely with cash?  It is thus no surprise that the average credit card debt per US household was $9,659 at the end of 2006 and is expected to rise yet again in 2007 as it has every year since the early 1990’s.

What will this rampant spending mean for the New Year?  According to John Silva, chief economist for Wachovia, “(Consumers) will still be spending money (in 2007) but it will be on credit card interest and minimum payments, not on apparel or eating out.”  Silva actually believes that the US economy may be heading towards recession in 2007 and puts the odds of such an occurrence at about 30% — certainly high enough to make most in the financial industry more then a little bit nervous.

What does this mean for you the consumer?  Add in the continued price of $90 oil,  the slide of the home housing market, an increase in the price of milk and the constant slide of the price of the US dollar abroad, and you get a continued difficulty for the average American both home and abroad in 2008.

We all want to give the best we can to our loved ones during the holiday season but doing so at the risk of your future financial sanity, may not be the best way for you to approach your holiday shopping this year.

Remember!  If you feel hesitate buying that purchase with cash, maybe you shouldn’t be buying it in the first place.  Your 2008 credit card bill may just thank you.