How to Avoid Common Holiday Gimmicks to Protect Your Credit (and Why You Should)

December 8th, 2017 | Author:

[R]etailers look at the holiday season as their time to make money and make up for any struggles from the rest of the year. They work to come up with all kinds of ways to bring in new business during this season. However, not all marketing ploys and gimmicks are good for you or for your credit. Know how to avoid these gimmicks and the reasons you shouldn’t give in.

Skip the Line

One gimmick that has become popular in recent years is the ability to skip ahead of the line if you fill out a store credit application. It doesn’t matter if you’re approved because you no longer have to wait in line to pay for your purchases. Customers who have spent hours shopping are easy prey. After all, they planned to pay cash for their purchases anyway, so all they have to do is fill out a quick application.

What many don’t realize is that every inquiry can ding their credit, causing it to drop a few points. While it may not seem like a big deal, very many of these inquiries can take your score down several points.

Take an Extra Percent Off

Retailers also offer a discount on their sale prices if you apply for a store credit card. They know if you’re approved, you’ll probably spend more than you had planned. If you aren’t approved, your credit will take a hit. If you are approved, you may not be able to afford another credit account or it could hurt your credit score as you max out the card.

Buy Now, Pay Later

Stores offer the option of buying on credit and making no payments for six months or even longer on major purchases. What this does is give you the feeling of free items, but what usually happens is that you wait until the end of the delayed period and the interest charges accrue. You’re left with a high balance and a purchase that cost more than you had planned.

If you choose to take advantage of this promotion, make sure you start making payments right away. Plan on having the balance paid in full by the time the introductory period is over.

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