When you are standing in the store with a full shopping cart, a maxed credit card, and no cash just days before Christmas what are you going to do? The stores make it so easy to “Buy Now, Pay Later”. These deferred payments are like lay away but in reverse. The store offers you credit so you can take all your gifts home now and make small monthly payments throughout the year. No matter how your wrap up paying for something later it still creates debt. The stores will do whatever they can do to get you to buy, buy, buy!
Many stores make it so easy by offering to charge your credit card for a fraction of what you owe for your purchases every month without interest charged by the store (but remember if you don’t pay off that credit card in FULL every month you WILL PAY interest and/or penalties). That way the store gets their money and your credit card company can chase you for the payment if you don’t pay.
Let’s put some numbers to it to see what a deferred payment plan might look like. If you spent $300 on gifts, you might agree to pay $30 for the next ten months to pay that off. That sounds reasonable and doable, but when you consider that you will make your final payment sometime in October and need to start Christmas shopping again soon. If you didn’t start saving money for your Christmas spending in January because you needed to make your $30 monthly payments on presents from last year, you are right back where you started. Standing in the store days before Christmas looking for a way to buy your gifts. It can become a vicious cycle.
Break out of the cycle by creating and following a spending plan so you make unemotional decisions during your holiday shopping. Click here to get some resources to start your spending plan today!