This article is part of the High Cost of Being Broke series, produced by Broke in Philly, a collaborative reporting project on economic justice. Click here to see all the #HighCost stories.

Last year’s hottest gifts included products from RiRi’s Fenty Beauty line, the PlayStation VR and Nintendo Switch, and Fingerlings Unicorns.

All that winter cheer came with a hefty price tag. Americans rang in the new year with an average of $1,054 in debt from the 2017 holiday season, according to MagnifyMoney’s annual post-holiday survey — and many are still paying it off.

According to a YouGov report released in November, 15 percent of Americans haven’t yet caught up with their holiday spending from last year, and some will continue paying it down for the next five.

People living in Philadelphia, the poorest large U.S. city, face this problem often. Collectively, the city carries the 11th highest credit card debt in the nation — and chances are this season will only make it worse. On average, Americans are planning on spending 14 percent more this year than they did 12 months ago, per Experian.

And buying presents on credit means that in the long run, they cost more.

Peer pressure is stronger than ever

Why do people lose their grip on finances around the holidays? It isn’t because they’re reckless or stupid, local bankruptcy attorney Brad Sadek told Billy Penn.

Societal pressure to “buy buy buy” has increased because of social media, Sadek suggested. Photos on Instagram and Facebook expose people to “those who seem so much happier than you because of the things they can afford to have,” he said. And kids, already trained by advertising to believe they need lots of presents to be normal, have easy access to those platforms, which can lead them to rev up parental guilt trips even more.

Add to those factors the existence of seamless online shopping, and it’s a full court press. “Stores make it so easy to spend money now” Sadek noted. “You don’t even have to go in them to make a purchase.”

Beware store brand credit cards

If you do go to a physical store, you’re often met by the “buy now, pay later” spiels that sales clerks are trained to give at the checkout counter. When you’re shifting your gaze between your enormous bill and the tokens of love and gratitude you’ll be bestowing on friends and family, a 20 percent sign-up discount for a new credit card can be awfully appealing.

But those retail brand credit cards carry some of the highest interest rates in the industry — the median APR is around 26 percent, per a recent study, compared to 21 percent for general purpose cards.

At Macy’s, for example, the APR is 27.24 percent. If you buy a $200 watch there and take two years to pay it off, your total cost for that timepiece jumps to $260. That’s if you make all your minimum payments on time — the late fee is a whopping $38.

Target has a slightly lower APR (24.90), but it still adds up. A $165 Barbie Dreamhouse Playset purchased on the store card would have a total cost of $188 if paid off in one year, or $210 if paid off over the course of two. That’s a more than 25 percent premium.

The problem with layaway

One potential way to avoid this is by using layaway — which allows you to reserve an item and make partial payments over time (usually with minimal fees or interest) until you eventually cover the whole cost.

However, not all stores offer it, although there’s been a general trend to revive the service after it disappeared for several decades. Game Stop and Walmart are two popular Philly shopping spots that offer layaway.

But it’s not the best for holiday gifts, because it requires a lot of advance planning, since you’re not allowed to pick up your purchase until it’s fully paid off. “Honey, I bought you a beautiful new watch, but it’ll be sitting in a drawer for the next 10 months” is tough to stretch gift-wrap around.

Where to get help

If you end up in the credit card debt spiral, whether due to holiday shopping or not, there are several Philly organizations offering free or low-cost counseling on financial literacy, debt relief or credit repair.

Asociación Puertorriqueños en Marcha 

600 W. Diamond St.  

Contact: (215) 235-6070

Bridges to Wealth

3620 Locust Walk, Steinberg-Dietrich Hall

Contact: Fill out the form here 


174 W. Diamond St. 

Contact: (215) 634-7245

Center for Hunger-Free Communities

3600 Market St. 

Contact: (267) 359-6237


1608 Walnut St. 

Contact: (215) 563-5665

Community Legal Services of Philadelphia

Center City: 1424 Chestnut St., North Philadelphia: 1410 W. Erie Ave. 

Contact: (215) 981-3700, (215) 227-2400


141 E. Hunting Park Ave. 

Contact: (215) 627-3100


1301 N. 2nd St. 

Contact: (267) 236-7000

Operation HOPE

301 Market St.

Contact: (267) 394-1697

Philadelphia Council for Community Advancement

1617 John F. Kennedy Blvd. 

Contact: (215) 567-7803

Philadelphia Federal Credit Union

Multiple locations 

Contact: (215) 934-3500

Philadelphia Legal Assistance

718 Arch St. 

Contact: (215) 981-3800

SeniorLAW Center

1500 John F. Kennedy Blvd. 

Contact: (215) 988-1244

Shared Prosperity Philadelphia

1234 Market St. 

Contact: (215) 563-5665

The One Less Foundation

38 Maplewood Mall

Contact: (215) 278-4400

United Way of Greater Philadelphia and Southern New Jersey

1709 Benjamin Franklin Pkwy. 

Contact: (215) 665-2500

Urban Affairs Coalition

1207 Chestnut St. 

Contact: (215) 851-0110