The Top 5 Types Of Credit Not To Use For Your Christmas Shopping

The holidays are a beautiful time of year

The holidays are a beautiful time of year. If you have children, there is nothing more memorable that seeing your kids peer through shop windows with a twinkle in their eyes. Only now with IPODs, gaming systems, mobile devices and more; one Christmas gift could cost you $100 dollars or even more.

Many Canadians and Americans have felt the financial squeeze in recent years and more and more have turned to credit to make ends meet during the holidays. We dont recommend this but recognize that sometimes using credit can bridge the gap.

I think whats important is that if you are going to use credit during the holidays that you choose the right type of credit. It is for this reason that we have prepared a short list of the types of credit you should not use to purchase holiday gifts.

1.Payday loans are the most expensive, inflexible form of credit and we do not advise consumers to use them.

2.Store cards (even large department store cards like the Bay), bear interest rates as high as 29.99%.

3.Prepaid Master Cards have large fees. If you are shopping online, a Pay Pal account is much more affordable (usually there are no charges and the vendor pays the fees) and its fully secured and can be used on most websites.

4.Interest free cards offered by finance companies may cause you to spend much more money than you had initially planned. Also these are usually only interest free for a period of time and when they come due, you could be subject to interest rates from 20%-30%.

5.Overdrafts are easy to use and bear large interest rates. Also depending how far into your overdraft you go, you may have a hard time getting your bank account out of the red and back into the green. Overdrafts usually bear interest rates that exceed 20%.

If you have to use credit over the holidays the best type to use is a low rate line of credit from a bank. If you have a higher rate major credit card with your bank, this may be the time to discuss converting the credit product from a credit card to a line of credit. Lines of credit are usually less interest.

If you dont have a major credit card and dont qualify for one then you arent left with many affordable options, so our best advice is that you try to scale back on your holiday gift list or research deals to trim your budget. For more information about obtaining credit over the Christmas holidays please visit www.trueassess.com.

by: Courtney Jewell-McElroy

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