By Damir Govorcin

THE overuse of credit cards at Christmas will drive low to middle income families to financial ruin, says David Bell, a financial counsellor for Centacare Sydney.

He also warned consumers to avoid using credit cards at all costs.

“ People fall into the trap of signing up for three or four credit cards at Christmas without realising the significant impact it can have on their lives,” he says.

“ It’s easy to fall into the trap of living for today, but that mentality can have dire consequences, especially at Christmas.

“ Credit card debts of around $3000 are often accumulated over Christmas, which can take four to five years to pay off.

“ People should budget for Christmas all-year round, not just at Christmas.”

Mr Bell added: “I see people around February and March, who haven’t paid their rent or electricity due to overspending at Christmas.

“ Society puts pressure on people to perform for their families at Christmas, but I don’t think children are so materialistic that they don’t understand they can’t have every toy.”

Retailers are preparing to divvy up to $33 billion in sales between them in November and December, a figure Mr Bell finds disturbing.

“ I don’t think spending $33 billion in stores is the true meaning of Christmas,” he says. “Giving and receiving presents is nice, but people should concentrate more on the faith side of things, rather than being caught up in the spending hype.”

February is when families start to feel the post-Christmas financial pinch.

The school holidays are over and the bills start coming in.

But there is no money to pay them.

As a result, parents can be filled with a sense of shame and guilt and lose all self-respect.

St Vincent de Paul Society budget counsellors each see more than 600 people a year who have racked up a Christmas debt.

Since 1996, budget counsellor Sheila Kinsella has helped hundreds of families on the edge of financial ruin.

She says the lack of money and the pressure to give their children what they want at Christmas pushes families beyond their financial limits.

“ Christmas brings out a lot of tension in families with no money, and problems such as domestic violence increase, which adds to the situation,” she says.

“ Disadvantaged families on low income or Centrelink payments hate the thought that their children won’t get the presents they want, so they spend what they can’t afford.

“ They not only over spend on credit cards, but they also get money off loan sharks who charge 45 per cent interest.

“ As a result, they can’t meet the hefty repayments and find themselves in a financial mess.”

Mrs Kinsella’s job is to negotiate with bank creditors, loan sharks and debt collectors to buy families some time.

“ Sometimes the debt collectors are very good,” she said. “Other times you have to do a lot of talking and convincing.

“ Eventually, these debt collectors know they will get their money back, but it may take a couple of years.

“ We work with people to get their dignity back and help rebuild their self-confidence.

“ We show them there’s light at the end of the tunnel.”