When a bargain isn't a deal

Photo: Contributed

More than 50 per cent of holiday purchases are made on credit – but only 60 per cent of Canadians pay those balances off in full each month.

According to Abacus Data for the Canadian Bankers Association, the average Canadian spent $888 on holiday shopping in 2014.

If that number holds steady this year, those who don't pay their credit cards in full could find themselves paying much more than first budgeted for – making those incredible Black Friday and holiday deals not such a great buy after all.

If left on a credit card for 90 days, that $888 would actually cost $917.76. If left for an entire year, the total bill would be $100 more than the original cost.

“A lot of people make purchases during the holidays and then end up paying high interest rates every month for the rest of the year," said Yvonne Sutton, a bankruptcy trustee with MNP Debt.

"Those gifts wind up costing a lot more than the sticker price. Add the interest accrued to the original cost of the gift, and suddenly that gift doesn’t seem so affordable even at the sale price.”

TransUnion recently reported credit card debt at a two-year high heading into the 2015 holiday shopping season.

“Average credit card debt is now $3,745, making it more important than ever for shoppers to be mindful about how much they are charging," cautions Sutton.

"Even if it seems like there are deals to be had now, it’s not worth piling on more debt."

Sutton says use cash, set a budget and be disciplined.

“Many are managing their interest charges for now but some are delaying the inevitable, allowing their debt to snowball, especially over the holidays. Every January we see many individuals unable to meet their debt repayment obligations from holiday spending,”