Help! I can't stop shopping!

John W. Schoen Senior Producer • Profile • E-mail

The latest tally of consumer debt last week showed Americans have taken on record levels of borrowing. Maybe that's why a number of Answer Desk readers are looking for help taming the debt beast. Nicolle in New York says she's having a hard time getting out of the Christmas shopping spirit. And Jacinto in New Jersey has gotten himself in way over his head.

BINGE SHOPPING
Help! I cant stop shopping! Ever since before Christmas, I've been on a buying binge. I put my credit cards away, but still manage to spend more money on things I wouldn't have spent money on a year ago. How can I get back into my pre-buying binge mindset? I've joked to everyone that at the end of the month, I'll stop, but I'm not sure how to get ready and I'm afraid of getting back into debt (although my bills are paid on time and way above the minimum due) and getting in trouble.
Nicolle R. -- New York, N.Y.

You could always check yourself into shopping rehab. Or move to a country where lenders still limit what they’ll lend you based on how much you can afford. But before you do anything drastic, try sobering up on your own. This little math exercise might help:

Even if you’re “way above the minimum due,” you’re digging a deeper hole as your credit card balance rises. So figure out how fast. Take your January balance, subtract your November balance, and divide by two. That’s how fast you racking up new debt – call it your “monthly binge factor.”  Now multiply that number by 12. If you keep spending at you current rate for the rest of the year, that’s how much credit card debt you’ll owe by next Christmas.

At that point, your monthly minimum will be substantially higher, and you’ll be paying the bank even more interest. The problem with “monthly minimums” is that they may not even cover your finance charges for a given month. So even when you think you’re keeping up, you’re really falling further behind. The longer you continue, the more of your hard-earned cash -- money that you should be spending on shopping -- will go to pay interest. Eventually, you’ll be turning over all your money to the bank.

So, go down to the nearest branch of the bank holding your credit card and stand outside. Picture yourself walking in the door every month with a shopping bag full of money and walking out empty-handed. (For good measure, picture yourself old and gray, with a walker.)

That’s where you’re headed if you don’t stop.

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