This year, holiday shoppers plan to spend more money, shop earlier, and try new retailers as a result of potential inventory shortages. TransUnions 2021 Consumer Holiday Shopping Report.
Nearly 3 in 4 consumers are considering rethinking their holiday shopping strategy amid supply chain problems – a third (33%) of survey respondents are shopping earlier this year, a quarter (25%) Are considering alternative gifts and can make 14% less holiday shopping.
Compared to the previous year, there has been a 22% increase in the number of respondents who want to spend more on holiday shopping in 2021 after two consecutive years of decline. during the coronavirus pandemic, Additionally, 15% more consumers plan to use credit for their purchases.
If you’re planning on borrowing money for holiday shopping, it’s important to compare your options. Keep reading to learn more about putting seasonal expenses on credit, and Compare Your Options For credit cards and personal loans for free at Credible.
3 Ways to Borrow Money for Holiday Shopping
The best way to pay for the discretionary expenses on your shopping list is by: budget and upfront savingsBut the holiday season has a way of sneaking up on even the most active consumers. Before you know it, it’s November, then Black Friday – and December is just around the corner.
If you’re planning on borrowing money to pay for Christmas gifts, Thanksgiving dinner, or plane tickets to meet family, consider these options:
- Introduction Open a credit card with 0% APR offer
- Buy now, pay later use the service
- Take out a fixed-rate holiday loan
Learn more about each financing plan in the sections below.
1. Introduction Open Credit Card with 0% APR Offer
Putting holiday purchases on a credit card can be a quick way to raise more money. high interest loan As much as you can pay. The average interest rate assessed on credit card accounts in Q3 2021 was 17.13%, according to the Federal Reserve,
However, it may be possible to skip paying interest altogether if you can open a credit card. 0% APR Introductory Period, These offers are reserved for credit-worthy borrowers with a good credit score – that’s a score of 670 or higher Using the FICO Scoring Model,
The zero-interest purchase period typically lasts 12, 15 or 18 months. when the offer expiresThe credit card issuer will charge interest on the balance amount. But if you’re able to plan your vacation expenses carefully, it’s possible to pay off the balance you earned before the 0% APR period ends.
2. Use Buy Now, Pay Later service
If you’re part of the vast majority (83%) of consumers who plan to spend at least half of their holiday shopping online this year, according to a TransUnion survey, you may be familiar with a growing financing option. which is called “Buy Now, Pay Later” (BNPL). Offered at the time of checkout, the service allows buyers to split their purchases into multiple installments over a set repayment plan.
This financing option has its advantages: Many BNPL companies no credit check required or charge interest. In addition, BNPL financing is available at checkout through a number of major online retailers such as Amazon and Walmart. This is an accessible and convenient option.
However, BNPL comes with its drawbacks. Some companies, such as Affirm, charge up to 30% APR as part of their financing agreements. Most companies charge late payment fees and may even report you as the delinquent. credit bureau If you do not pay on time.
Holiday shoppers who plan to use Buy Now, Pay Later for their purchases should read the payment plan terms and conditions carefully to avoid fees, additional interest and negative credit impacts.
3. Take a Fixed Rate Holiday Loan
a holiday loan a. another name for personal loan Which is used to finance vacation expenses. Personal loans are one-time loans that you repay in fixed monthly payments over a specified period of time.
Compared to credit cards, personal loans have low, fixed interest rates and estimated payment plans. While the average interest rate for credit cards is 17.13%, the average rate on a two-year personal loan is 9.39%, according to the fed,
You can also consider using a personal loan to consolidate credit card debt you accrued during the holidays. a Recent credible analysis found that creditworthy borrowers have the opportunity Save about $2,400 On interest by consolidating your loan into personal loan.
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