Could Black Friday = Lower Credit Scores

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The day has come...and now it is gone. Black Friday is over and we should know what impact it will have on consumer confidence in the next few days.

Dubbed "Black Friday" in reference to red ink representing loss and black ink representing gain, today's start to the Holiday Shopping season is believed to be the day that retailer balance sheets finally cross over to profitability.

Here is what we know already. Black Friday is of special significance this year because consumer spending accounts for two-thirds of the U.S. economy. Spending was up 7% this year over last year with the average consumer spending $372.

Americans are shopping in full force, and we can expect economic optimism and a mild rebound in the stock market. Unfortunately for home buyers, this should also lead mortgage rates higher.

By contrast, if sales figures are weaker than predicted, we can expect talks of a recession to grow.

So what does this mean for you?

If you went out and bought gifts with you credit card you could be paying off those Black Friday deals well into the next holiday season.

Here's an eye opening example...

If you were the average consumer and spent $347 on your credit card, at a national average interest rate of 12.82%, and made only the minimum monthly payments...IT WILL TAKE YOU OVER 3 YEARS TO PAY OFF THAT DEBT!


What does this mean for your credit score?

In order for this example not to affect your credit score - you would need a available credit balance of $3,100 so you stay below the 10% mark. Calculate your debt to credit ratio by dividing your current balance by your available credit limit.

Anything over 10% could mean trouble for your credit score.