Saying "Charge It" Could Cost You More Than You Bargained For

East Texans are hitting the stores and spending a lot shopping this holiday. The stores are making it easy. Everywhere you turn there's a sale sign that's just baiting you to buy, buy buy.

Even though times are tough economically, Americans are expected to spend more this holiday than last year. The American Express retail index says the average family will spend $1,656 dollars this holiday up from $1564 last year. And they're buying it all with plastic.

"I don't have as much cash this year it seems like," says Julia Olajis. "I kind of save my credit cards for the holiday season unfortunately, and then charge them and try not to use them again for the rest of the year after I charge them all up."

But putting your gifts on credit can cost you more than you bargained for. For example, if you spend $1000 dollars this holiday on a credit card with an interest rate of 16 percent, and you only pay the minimum balance each month of about 25 dollars, you'll be paying off this years Christmas gifts for 58 months, that's well into the year 2006. And you'll end up paying more than $438 in interest.

Financial planner Neal Vasso says unfortunately, the debt doesn't end there.

"The consumer credit counsel says 57 percent of all Americans that charged their Christmas last year are still paying those bills," says Vasso. "It is an evil cycle, the accumulation of the debt continues to build."

But it doesn't have to.

"I am not trying to spend too much this year I am kind of on a budget," says Anthony Smith. "We're mostly paying cash."

Using cash is always the better option. Neal suggests you put cash aside for holiday spending instead of saying "charge it". And make a list -- if you stick to it you can really cut compulsive Christmas shopping. Michelle Mortensen, channel seven news.