UNIVERSITY PARK, Pa. -- Many people like to splurge on gifts for the holidays. But Christmas cheer can turn to January panic when post-holiday bills fill the mailbox. A consumer scientist in Penn State's College of Agricultural Sciences says four warning signs can tell you when you're in too deep.

Cathy Bowen, assistant professor of agricultural and extension education, says to watch for:

--Total Monthly Bills that Exceed Your Monthly Income. The combination of your credit card bills and regular monthly expenses (mortgage or rent, utilities and reasonable food expenses) should not consistently exceed your monthly take-home pay.

--Excessive Worry Over Pending Bills. "If you find yourself thinking about the bills you have to pay rather than attending to matters at hand, such as your job, you may have legitimate concerns," Bowen says.

--Using Credit Cards to Pay for Day-to-Day Purchases. "If you must use credit cards to pay for items like toilet tissue or diapers -- you don't have a choice, it's the only way you can pay for it -- then you have a problem," Bowen says.

--Making Only Minimum Monthly Payments on Credit Accounts. "If you have only enough money to make the minimum monthly payment on credit card accounts each month," Bowen says, "that's a sure sign that you need to put brakes on spending. If you can make only the minimum payment, the road out of debt will be a long and costly one."

If you experience one or more of these warning signs, Bowen suggests several strategies for corrective action.

"One of the first things you should do is to look carefully at your monthly credit card statement and make sure that the charges are correct," Bowen says. "You don't want to pay for someone else's mistake. Creditors and merchants make mistakes. Sometimes a charge can appear on your card that doesn't belong to you."

Bowen also recommends taking an objective look at your current financial situation. "Sometimes, a comparison of monthly income and monthly expenses can inspire consumers to make a written spending plan or budget," she explains. Most of us can find one or two areas to cut back on -- or things to do without -- until bills are repaid or under better control.

"If you want a second opinion about your current spending habits or budget, consult a local credit counseling agency, your county Penn State Cooperative Extension office or another community agency that has experience with household budgets," Bowen says. "Look in the Yellow Pages of your phone directory under 'credit or debt counseling services', or call the local cooperative extension office for assistance or help in identifying community resources."

Bowen also suggests that you pay credit card bills early in the billing cycle. The "average-daily-balance" method is used to calculate monthly finance charges for many credit card accounts. By paying early in the billing cycle, you will reduce the average daily balance of your account for that month. "You'll pay less in finance charges if you pay early, even if you can make only the minimum payment due," she says.

Bowen warns against taking advantage of the "skip-a-payment" offers that many creditors offer in January and February. "In most instances you end up paying more, because finance charges continue to accrue during the month that you don't make a payment," she says. "So, if you get a skip-a-payment offer, think twice before using it. Even if you pay only the minimum amount due, you still will pay less in finance charges than if you skipped the payment ."

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EDITORS: For more information, Cathy Bowen can be reached at 814-863-7869.

Contacts: Gary Abdullah GXA2@psu.edu 814-863-2708 814-865-1068 fax