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Care to be taken so that the use of a credit card in Christmas purchases does not damage plans or finances for 2023

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It took him four years to pay off a debt of $5,300 that he had with one of his credit cards and for that he stopped using it and the last two years he paid two and three times more than the minimum fee. If she had not done it that way, Patricia, she would continue to be in debt for more years due to the daily purchases that she made for her when she ran out of cash, which is why she takes great care of herself at this time.

It is that the offers are already everywhere, and not only from the stores with discount percentages but also from the cards to finance those purchases with or without interest and with months of grace, that is to say that today’s expenses will begin to be paid in February, March and even from June 2023.

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There it must be taken into account that the income that has not yet been earned is being committed on dates where there will be other expenses such as tuition and purchases for the school period, and other celebrations such as Mother’s and Father’s Day.

Overcharging the quota is one of the things that should not be done with a credit card. The personal finance specialist Bertha Romero indicates this in the financial education program Tus Finanzas. “Exceeding the use of cards during the holidays can hurt your credit score because it increases credit utilization” and that refers to the percentage of available credit you are using.

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The key is to have a budget, write for whom, what and how much the gifts will cost. This is how control is kept to keep card balances low, especially when a major purchase such as a car or a home is planned.

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It should even be clear that the Christmas season has just begun.

“It is important to consume responsibly and adjust to our needs and the budget we have, considering that after black friday Christmas deals will come, which could end in debt problems during the first months of the following year,” says César Coronel, lawyer and general manager of Defensa Deudores in Ecuador.

It also alerts of other care that must be taken. “On many occasions we have observed brands that raise the price of their products a few days before the black friday so that -once the discount is applied- it remains at a similar value. At the same time, cases of misleading advertising often occur when the actual product does not resemble the advertised product, its functions are different from those advertised, or there is incomplete information about product conditions, taxes, and interest.”

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To avoid any inconvenience, he suggests knowing the price of what you want to buy in advance. Know how much the product costs now, how much it cost before, and how much it could cost in sales seasons.

  • Evaluate the best payment method. It is always preferable in cash, but if a credit card is used, it is important to define whether it will be made with current payment, deferred, without interest or with months of grace.
  • Compare prices no matter how attractive the discount seems to choose the best option.
  • Consider all the extra costs that the purchase entails, such as value added taxes (VAT), special consumption taxes (ICE) or currency outflow (ISD) in the case of international purchases.
  • Think about the future. After the black friday The Christmas festivities are coming, so in case of resorting to debt, it will be necessary to consider where the resources will come from to pay without losing sight of the fixed expenses.
  • Do not fall into the temptation of promotions of the moment, to do so, review what you have at home and think about what you really need to acquire.

Your Finances also recommends avoiding impulse purchases that can quickly add to your total credit card spend during the holidays and has a trick: the 24-hour rule. “If you find something you want to buy that doesn’t fit into your holiday budget, wait 24 hours and check the item again. This way you will have enough time to reflect and decide if the purchase is worth it.” (YO)

Source: Eluniverso

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