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Christmas in July
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July 7, 1998: 3:52 p.m. ET
Holiday gifts should last longer than the credit card balance
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NEW YORK - It's July and many Americans are just breaking free from last year's Christmas credit card debt.
While most people say they'll pay off their holiday credit card bills in two or three months, it actually takes them six, according to the American Bankers Association. It's what personal finance experts call "a holiday hangover."
Now is the time to plan
"It's a combination of not planning and not thinking about the financial impact," said Suzanne Boas, president of Consumer Credit Counseling Service in Atlanta. "Very, very few people have sat down and tried to get their hands around holiday spending and more and more of those incidental expenses are going on credit cards."
And even though there are months to go before frost hits the pumpkin, experts say now is the best time to get a grip on this year's holiday spending.
 A big part of the problem is the December holidays aren't just about gifts. There are decorations, holiday clothes, parties and trips, special concerts and plays, postage for all those cards and parcels and, of course, all that food.
"The obvious solution is not to spend a lot of money," said Ray McAlister, a marketing and credit management professor at the University of North Texas. "But Christmas is Christmas. It's important to a lot of people."
Add up last year, work from there
The first step to making the 1998 holiday season hangover free is tallying up the cost of last year's holiday.
"Whether it's going to cost you $300 or $1,000 or $3,000 at least you have a starting point," Boas said. "You can pare it down or save up for it from there."
Experts suggest saving money for the holidays as early in the year as possible and limiting credit card use. The rule of thumb: Only charge what can be paid in full within two or three months.
Linda Sherry, editorial director for San Francisco-based Consumer Action, a consumer advocacy group, also urges people to steer clear of department store credit cards.
"They can be tempting but they have very, very high interest rates," Sherry said. She added that debit cards, which yank money directly from a person's bank account at the check-out counter, can be a good way to stay on budget because "you pay as you go."
Shop early, use sales
Another way to trim holiday expenses is to start that gift-shopping early and to make use of sales and specials throughout the year.
"It's not very romantic to shop for Christmas in July but it will save you money," McAlister said. "Shop the after-Christmas sales for next Christmas."
Do everything to avoid falling into the trap of the weary, last-minute shopper who buys expensive and sometimes frivolous gifts just to have something -- anything -- to give.
"So many people that wait until the last minute buy all these things with money they don't have," said Steve Rhode, president of Debt Counselors of America.
And the closer to the holidays, the worst it gets. Rhode recalled watching a man purchase a $400 phone on Christmas Eve just to have something to bring home.
Don't trust your impulses
Rhode emphasized the importance of shopping early and with a list.
"With any type of impulse shopping you're going to end up buying a lot more than if you make a list," he said.
Another way to keep holiday spending from spinning out of control is simply knowing when to stop.
"When is enough? Where is the finish line?" Boas asked. "If you don't have an end you're going to keep going as long as the stores are open. I wonder how many Christmas Eve shoppers are people who can't find the finish line." 
--by Bank Rate Monitor for CNNfn
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