As we close in on the holiday season, it's easy to get in over your head with credit card spending. According to Yahoo! Finance ("Top 5 Reasons Why People Go Bankrupt"), poor use of credit is the third most likely cause of bankruptcy.

When credit comes easy, some people just cannot control their spending. Before they know it, credit card bills, installment loans, car payments and "same as cash" plans become a burden too heavy to carry. If the borrower is unable to make minimum monthly payments on this debt, or secure a debt consolidation loan, bankruptcy becomes the inevitable alternative.

Statistics show that even when some borrowers consolidate credit card debt, this only delays the inevitable bankruptcy filing. While a home equity loan might be worth considering, it's never smart to overuse this option. If this payment becomes unmanageable as well, borrowers may find themselves facing foreclosure.

The lure of overindulgence

Just like we eat too much between Thanksgiving and New Year's Day, Americans also tend to spend too much. It's no surprise that every January 1st we all "resolve" to put an end to these vices, but it's much easier to eat healthier than it is to break our spending habits. Even the most financially savvy adults tend to rack up large credit card bills during the holiday season.

A little self-discipline

Although it's tempting to spend more than you can afford, a disciplined approach can help you maintain financial sanity.

Why limit holiday credit card purchases? Simply put, credit cards give the illusion that you can buy more. Even if you shop for bargains, gifts bought on credit cards end up costing more money. By the time you add in the months of finance charges, you will ultimately pay a lot more for these gifts than if you had paid cash. High credit card balances affect your credit score too, especially if you are spending more than 30 percent of your credit limit.

8 Tips for Avoiding Holiday Debt

Stick to these spending principles and you will keep your holiday spending to a minimum. Here's how to put them into practice.

1. Save up first – Paying cash instead of using a credit card will help you avoid holiday debt all together. If it's too late to start saving for this year, start it in January. Put aside a little something each pay period and use that to finance your holiday purchases. Most people find that they spend more wisely when they are paying in cash.
2. Set up a budget before you start – The savviest holiday shoppers plan purchases in advance. Don't just go out to the stores, armed with coupons, and start shopping. Decide first what you will buy for each person on your list, and how much you are willing to spend. No matter how tempting it is, use discipline and don't go over your budget.
3. Make a list and check it twice – We've all heard that popular song about Santa making his list, so why not do the same? You may be known among family and friends for your generosity, but that doesn't mean you need to spend more than anyone else. Why not spend more time being creative about your gift-giving. Consider handmade gift baskets, fancier wrappings, home-baked treats, or unique and meaningful gifts? In the end, these gifts will be more memorable than that pricey designer sweater.
4. Use layaway – The ease of personal credit caused layaway to disappear for a few years, but it's making a comeback. Many larger retailers, such as Walmart and Kmart, are bringing it back into fashion. When you start shopping early enough, it's possible to pay a little bit toward your holiday purchases each month, thereby paying for them completely before the holidays.
5. Don't shop for yourself – This is probably one of the hardest things to do during the holidays. With all those "doorbuster" specials on Black Friday and all the time spent in stores, it's easy to double your holiday purchases by shopping for yourself. Save your personal purchases for the post-holiday season. No matter how great the prices are now, they will be even more enticing on December 26th, and by that time you may have received what you wanted from others.
6. Shop online first – Shopping online is a more "directed" and "considered" activity, making it harder to buy on impulse. By browsing a store's inventory online, you can quickly decide what you really want to buy before you leave the house.
7. Leave your credit cards at home – When credit cards are removed from your wallet, you will be forced to use the money you already have. It is much easier to stick with a budget when you are shopping with your available cash. If you must use a credit card for purchases, pick one card and set a realistic spending limit for your shopping trip.
8. Only buy what you can afford to pay – Here is a sobering way to view credit card purchases: You are borrowing from your future income. The only way to get ahead financially is to live in the present moment with your purchases. This means if you cannot afford to pay your balance off next month, you are mortgaging your future. Think about it. Do you want to pay for this momentary until next holiday season?

These tips can prevent you from falling victim to credit card debt, one of the leading causes of bankruptcy.  For more information on personal debt managment and bankruptcy, consult with a Colorado Springs bankruptcy lawyer. 

Imagine a credit card that charged a 36 percent APR, slapped you with a fee when your credit limit increased and cost you $400 a year just to own -- yet, the company tells you they're doing you a favor.

It's a reality.

Our Colorado Springs bankruptcy attorneys know that credit cards with predatory lending practices are one of the main reasons so many people get embroiled in debt. We previously discussed how many people are choosing to avoid using credit cards in order to avoid having to seek debt relief or file for a Colorado Springs bankruptcy. This card represents one of the most shameful examples of why people are backing away.

The platinum card, distributed by First Premier, (FIRST PREMIER, if you can dig it) already has nearly 3 million customers, according to CNNMoney, and it solicits another 1.5 million every month. The company's CEO claims the business is doing people a favor, because the card is aimed at people with poor credit, who might otherwise not be able to get a credit card. The fees are justified, he said, because of the risk the company is taking on.

One has to wonder, though, whether customers who are already struggling financially could possibly beneift from being slammed with such outrageous fees.

The CEO of CardHub, which allows users to compare credit cards online before applying, was quoted by CNNMoney as saying that perhaps the worst of those fees involves a credit limit increase fee, which charges the customer 25 percent of whatever amount the limit is increased by. So if your spending limit  is increased by $200, you pay an automatic $50 fee. Another online credit card comparison site CEO says he knows of no other company that does that.

"While (First Premier) is bragging about helping people back on their feet, they're in fact beating people when they're down," he said.

We understand that credit cards can be very useful - they can help improve your credit score and sometimes, you can't make major purchases unless you have some credit history. But a card like this isn't your only option if your credit is bad.

One different option is a secured card, which come with lower fees because the card holder has to deposit their own money into the account. That mitigates the lender's risk, without forcing the card holder to be shackled by fees.

Colorado Springs Chapter 7 bankruptcy lawyers know that anyone who has ever struggled with debt wants to ensure their children don't endure the same.

While some debts are inevitable, establishing good spending and saving habits early on can save them a great deal of heartache later on.

This is critical especially considering that a recent survey indicated that 12th graders were failing on basic, personal-finance literacy tests. (And only half of adults were able to get the right answers on basic questions about inflation and interest rates.)

A number of federal and state initiatives in the last year have focused on addressing these issues in high schools. For example, President Barack Obama's Advisory Council on Financial Capability has launched a campaign aimed at young people, with nearly two dozen money lessons important for children.

Here are some of those key points:

1. You are not going to be able to purchase everything you want. Consider as you conduct your back-to-school shopping - or any shopping - take a picture of a "want" item. Have them revisit it in a few weeks to consider whether it is still necessary.
2. Forgoing one purchase allows you to save up for another. One way to drive this message home is to hold off on simply buying the items yourself. Instead, give them money and help them decide how they should spend it and how much should be saved. Back-to-school shopping should at least partially involve older kids' allowance money.
3. Avoid trying to keep up with your peers. This is tougher than ever right now because social media sites like Facebook make it that much easier to compare your wealth to that of others - especially with some kids posting pictures of their new $200 designer jeans. But talk about how damaging it can be - not only to their wallet but to their self-esteem - to measure their worth in this way. Help them minimize impulse purchases.
4. Know that it is Ok to make mistakes. These can provide invaluable lessons. Some suggest allowing high school students to invest a small amount in stocks. They may learn to diversify if they lose it all on one product.

Contact us today for more information.

You may just now be settling down with the idea that your child is actually in college.

He or she is probably getting in the swing of classes, exams and group projects. But one area of study that college students as a whole routinely flunk is credit card savvy.

Too often, our Colorado Springs Chapter 7 bankruptcy lawyers are seeing younger and younger clients who seek are seeking bankruptcy protection because they got in over their heads with credit cards.

The good news is that for a college student or someone in your early 20s, a bankruptcy filing is unlikely to dramatically impact your financial future. You have more time to bounce back than, say, someone who is facing down retirement in the near future.

That said, part of what credit card companies bank on with college students is that they won't know how to spend responsibly. The fact is, it's good for college students to have a credit card, as it can help to boost their overall credit history, which they are not likely to have much of at this point in their lives. However, the problem is that to a college student, a credit card can seem like a magical wand of instant gratification. But then, of course, the time comes to pay up.

In the interest of avoiding major headaches for your child, here are some bullet points of what you may want to discuss:

• Be selective about the card you choose. Shop around and get the best interest rates. Check into what the annual percentage rate is, what kind of fees are attached to the card and whether there are any rewards available.
• Don't apply for more than two cards. This is what is known as a "hard inquiry," and it reflects poorly on your credit report.
• Speaking of credit reports, understand what a credit report is and how it can affect you. Also, take the time every few months to check your credit score and ensure there are no errors. This is also an opportunity for you to learn to manage that score smartly.
• If you can't pay it off, don't buy it. Credit cards are not free money, and they will end up costing you a great deal in the long run if you aren't careful.