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Massachusetts shoppers ready to pull out their plastic

With the winter holidays approaching quickly, Massachusetts residents purchasing gifts will be more likely to charge a few those items to one or more credit cards. According to a national organization, Americans rack up over $851 billion in credit card debt during December, more than other months.

Over the past few years, more consumers have been charging items, especially clothing, on their charge cards during the holiday shopping season. By contrast the use of debit cards, which allow a person electronically to withdraw from money he or she already has in the bank, has remained relatively stagnant.

This is not necessarily a bad thing. Credit cards offer a variety of incentives which shoppers, with some forethought and financial planning, can use to pay less for an item than they would have without a credit card. The trick is for a cardholder to budget enough money to pay the balance (without incurring interest) each month. Spending money one does not have naturally leads to adverse financial consequences.

However, even a person who does use credit cards carefully may suddenly have to face financial challenges because of mounting credit card debt. An unexpected loss of a job, a medical emergency, or another expensive crisis can leave a person without enough income to pay a credit card bill. While maintaining a healthy amount of emergency savings is best, when even that fails, a person in serious credit card debt ought to consider filing bankruptcy.

A bankruptcy may be the best way for an honest but unfortunate person in serious credit debt to get the fresh start that they need in order to re-establish their financial wellbeing.

Source: USA Today, "Smart credit card use during holidays pays off," Hadley Malcolm and Jayne O'Donnell, Oct. 11, 2012

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