Do I need to take out a loan for holiday purchases?

(WILX) – The holiday season is just around the corner and you might be in panic mode when it comes to your finances.

Experts have said that the best scenario is to pay cash for things or give gifts that don’t cost money, but if that isn’t possible, should you use a credit card or take out a? loan?

The first step is to examine your credit cards and determine exactly how much you would be charged in interest. Compare that with the interest rate of the personal loans that are offered to you.

Virginia Credit Union financial coach Cherry Dale said you want to consider all of your options before deciding how to pay.

“Also see if you have any points. A lot of us have accumulated points that we can use for things like gift cards or store purchases before actually using that credit card, ”Dale said.

If you decide to take out a personal loan – you can do it for just $ 500 – but the interest rate is usually higher because it is unsecured.

“What this will give you is a fixed amount of time and a fixed interest rate to pay off that personal loan and a monthly payment that you know you’re going to get,” Dale said.

Which could also help you pay it off faster, as often times with a credit card people only pay the minimum, which means they take longer to pay it off and lose more money in interest.

Dale said your best course of action would be to pay off your vacation debt this year as soon as possible and then start saving some extra cash throughout 2022 for your vacation shopping next year.

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