Holiday Spending Traps to Avoid
How to avoid the “hangover” that usually follows the reckless holiday spending? Here are some spending traps for you to recognize and avoid.
Bonus rewards, offered lavishly at this time of year, is the most common trap, since they make you buy more than you really need. It makes you spend past your budget and, as a consequence, commits to bigger debt to repay. To avoid this you can use rewards credit cards such as Chase Freedom Visa that provides $100 bonus cash back per $500 spend on purchases in the first three months, as well as other rewards and a 1 % cash back on all other purchases. Spending reasonably and responsibly, you will benefit greatly from this card.
Another trap are offers like “buy now, pay later”, made, as a rule, for bid-ticket items, like living-room sets and the like. These offers have little traps in their rules that can lead you to paying a lot more in the long run than you expected, in case you are not aware of them and/or don’t observe them. For instance, they can offer to waive interest if you remit on time, but if you fail once, the interest may be recalculated starting from the purchase date. In this case a 0% balance transfer can save you money on interest and give you more time to repay the debt free of interest.
Using convenience checks is one more trap that ends in paying higher interest rates. Using convenience checks (bank checks from stores or credit card companies) means that you don’t have cash for what you are buying. In fact, it is a cash advance on your credit card, provided on terms of higher interest rates. Instead you can consider using cards (like Citi Forward Card) that offer lower interest rates as a reward for timely paying of your bills.
