Beware of credit card debt from holiday sales

The Friday after Thanksgiving kicks off the holiday shopping season. Store promotions and sales lure millions nationwide, but are you really saving by shopping sales?

Mike Sullivan, director of education for Take Charge America, a national nonprofit credit counseling agency, said sale shoppers may be getting duped.

"If you don't need an item, don't buy it just because it's on sale," he said.

"Many shoppers who seek out bargains end up purchasing items they wouldn't normally buy if they weren't on sale. And what's worse is shoppers who charge sale items thinking they're getting a deal," Sullivan said. "When you add interest rates to the sales price, it can far exceed the original purchase price."

According to the National Retail Federation, U.S. shoppers are expected to spend $791.10 each on holiday merchandise this year. Sullivan said much of that will end up on credit card bills, so that $791.10 could end up costing hundreds of dollars more in the end.

To put this in perspective, Sullivan describes five of the mostwanted gifts this holiday season, and what you'll end up paying on your credit card when you only make the minimum payment each month*:

30GB iPod

Retail: $249

32 months to pay off: $65.12 in interest Credit card total: $314.12 Concert or professional

sports tickets

Retail: $400

62 months to pay off: $215.41 in interest

Credit card total: $615.41

3-Day Cruise (two persons)

Retail: $1,000

153 months to pay off: $1,115.41 in interest Credit card total: $2,115.41

Plasma TV

Retail: $2,000 222 months to pay off: $2,614.43 extra in interest

Credit card total: $4,614.43

Sullivan adds that you can still feel the credit card pinch, even if you don't purchase high-ticket items. "A lot of little purchases can add up very quickly," he said.

"Before making a purchase on your credit card, ask yourself if you are willing to pay 18 percent more than the purchase price. If you're not, you probably don't need it."

*Calculations apply to credit cards with an 18 percent interest rate. Minimum payments are considered 2.5 percent of the total balance.

Founded in 1987, Take Charge America, Inc. is a nonprofit organization headquartered in Phoenix. TCA offers a variety of services including financial education, credit counseling and debt management. To learn more about TCA or its programs please call (800) 823-7396 or visit www.takechargeamerica.org.