Holiday shopping is in full swing, and you’ll want to be smart about how you finance your purchases. WalletHub Analyst Jill Gonzales said if you have the option of zero-percent financing for a limited time or an immediate discount…
“Typically, I would go with that percentage off on that purchase that day. Cause then you don’t forget about anything or fall into deferred interest traps,” said Gonzales.
Gonzales said if you’re making a purchase on a credit card, you might want to look at benefits associated with your card, for example, price protection so you can price match a gift in the future, or purchase protection on things like electronics, which is similar to insurance.
“There’s also return extension. So, if you do want to add another 30 to 90 days onto something that you can return, you can do that as well,” said Gonzales.
She also warns against using the option of deferred interest on credit cards especially if you don’t think you’ll be able to pay it off in the given time period. Gonzales said for example if you don’t pay off the credit in the allotted time…
“Then you owe interest on the entire purchase, not just what you have left to owe, so it’s a very tricky situation,” said Gonzales.
Sometimes deferred interest can make your holiday purchases up to 27 times more expensive than you anticipated.