Credit card companies are freaking out as they try to entice shoppers to pay for gifts with credit. But those 5% cash back offers aren’t exactly worth taking on thousands of dollars in debt.

• Even though holiday spending is up compared to last year, shoppers are less likely to whip out their credit cards at the register this year.
• Some shoppers are trying to avoid taking on more dangerous debt, and some simply lost their cards because of the recession and last year’s credit card reform. Outstanding credit card debt is “bad debt” because it lowers your credit score.
• Card issuers make money when customers run up their credit bills and then fail to pay the entire balance at the end of the month. If they miss payments, their interest rates go up, and so does their total amount owed.

Facts & Figures

• Use of Visa and Mastercard cards fell 11% in the past year
• Spending on Black Friday was up more than 6% over last year
• 15 million Americans lost their credit cards because of the recession and new credit card regulations

Best Quote

“With the interest rates, it just seemed like I never paid it off.” – Liz Gonzalez, talking about her credit card debt