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Scrooge-O-Meter: The true cost of charging gifts

Given the economy this past year and with the biggest shopping days upon us, it's important to think about holiday spending and the true cost of using plastic for those unbeatable deals you're sure to be tempted with this holiday season.

Lutheran Social Services (LSS) Financial Counseling has a whimsical tool to help you stay aware of credit costs. It's called the Scrooge-O-Meter and can be found by visiting

"Those pre-holiday sale items could end up costing you quite a bit more for literally years after the initial purchase" explained Ruth Hutchins, counselor supervisor at LSS. "Say you spend $500 on a credit card that offers an 18 percent APR (annual percentage rate). If you only make the minimum payments until the card is paid off, your $500 purchase now costs you almost $700 once you've paid all the interest. Even worse, you will still be paying it off three holiday seasons later! Do you remember what gifts you purchased three seasons ago?"

Consider the following questions before you join your fellow shoppers this year:

--What are some of your fondest holiday memories? Involve family members in discussions about what the holidays mean for them. Do they remember all the gifts they received in years past or are family traditions more memorable? Keep old traditions alive and think creatively about ways to incorporate new ones.

--How can we slim down on holiday gift-giving this year? With extended family, suggest a white elephant gift exchange instead of buying a gift for every person. Or, draw names from a hat and set a price limit on how much everyone will spend. Consider making gifts for others, such as teachers, your hair dresser or baby sitter.

--What's the plan? Going into any store without a plan is like jumping out a plane without a parachute. Continuously doing so can lead to financial ruin. Once you're in the depths of a store it's easy to justify any "deal" and before you know it your cart is packed with a bunch of items that would never be on anyone's wish list. Go in with a plan and don't deviate from it.

Of course, quitting holiday shopping altogether is like going on a diet and not eating the foods you enjoy most. To be most successful this holiday season, remember that moderation is the key.

And whether you've overspent this holiday season or if you are facing financial problems of any sort, seek guidance from the experts. LSS Financial Counseling Service can help.

"Believe it or not, there's no better time to start planning for the 2011 holiday season than right now," Hutchins said. "Why not get ahead of your New Year's resolution to gain better control of your finances?"

LSS Financial Counseling Service, a member of the Better Business Bureau and the National Foundation for Credit Counseling, helps over 20,000 people every year with free budget and debt counseling, foreclosure prevention counseling and monthly debt management plans.

With nine offices statewide, LSS can work in-person with individuals and families or provide financial counseling by phone or online. For more information or to make an appointment, call 1-888-577-2227.