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Avoiding holiday debt - more consumers using cash and debit cards

Thinking about using cash or debit cards over the holiday shopping season? You're not alone! That's what most people -- or 70 percent -- will be using for their gift purchases, according to a new survey by the National Foundation for Credit Counseling, of which LSS of Minnesota is a member.

"Consumers are definitely thinking more about spending limits and avoiding more debt this holiday season," said Darryl Dahlheimer, program director of LSS Financial Counseling Service. "Regardless of the reason, one of the best gifts would be to begin 2011 with no additional holiday debt."

Here are some good reminders to help you make it a debt-free holiday season:

--Pay with cash or charge purchases and pay the bill in full when it arrives. Paying in full is one of the best financial decisions a consumer can make, either paying with cash now or paying off credit cards once the bill arrives. Good credit card use builds a positive credit history which results in a higher credit score, and never pay a cent of interest if paid in full every time.

--Avoid charging purchases and paying for them over time. As well-meaning as a person may be, spending can get out of hand, particularly during the holidays. Many are still paying for holiday 2009 purchases when they begin charging 2010 items. If tempted, consult the Scrooge-o-meter on the LSS site to see how long you'd have to pay.

--Bake your gifts. Make special cookies, gourmet pretzels or holiday goodies and deliver your fresh-baked goods to neighbors, teachers, elders in the community. Gifts don't have to be expensive to be meaningful.

--Create family traditions. While gift-giving can be a lovely way to share our blessings with others, participating in simple family traditions may offer the most meaningful aspect of our holiday celebration, and those traditions cost nothing!

Nearly 5,000 people participated in the NFCC national survey in October. Here is how all respondents said that they would pay for their holiday spending this year:

--Paying cash or using a debit card for my purchases - 70 percent

--Charging my purchases and paying the bill in full when it arrives - 10 percent

--Charging my purchases, and paying for them over time - 9 percent

--Utilizing layaway programs - 11 percent

LSS is a member of the Better Business Bureau and the National Foundation for Credit Counseling (NFCC). All LSS financial counselors are NFCC-certified as consumer credit and housing counselors.

If you or someone you know could benefit from free and confidential financial counseling at LSS, call 1-888-577-2227 or visit <