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Holiday debt: The gift that keeps on taking

With all the bright lights and cheer of the holidays we can lose track of what’s really important – our money.

No one wants to be a killjoy, but runaway debt can really kill the joy when bills start rolling in come January.

As it stands, the average Canadian household owes $1.65 for every dollar it brings in each year. That’s way up from 20 years ago when we owed less than we made.

Sure, the high cost of housing accounts for most of the gain through mortgage debt, but according to credit rating agency TransUnion the average consumer owes $21,247 in non-mortgage debt.

And that debt can add up at a meteoric pace – especially on credit card balances. Retail chains like Hudson's Bay (HBC.TO) charge up to 29.9 percent on the amount not paid before the monthly deadline. The 29.9 interest charge also accumulates 29.9 percent interest as it snowballs over time. Even if you make the minimum payment, the total amount owing can triple or quadruple the original amount in a few years.

There are cheaper alternatives like consumer bank loans and secured lines of credit but the best is to pay for holiday expenses in cash or with a debit card.

Being debt-free after the holidays is probably the best gift you can give yourself.

Dale Jackson is BNN's Personal Investor. Follow him on Twitter @DaleJacksonPI

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