Toronto, ON: As retailers pull out all the stops to earn shopper’s holiday dollars, many Canadians may be lured by the variety of financing options stores will offer in order to make the sale. But Consolidated Credit Counseling Services of Canada warns consumers to do their math before purchasing with anything but cash.
According to recent reports, leasing big ticket holiday gifts like the new iPad (which retails from $469) can end up costing consumers more than $2,500 over the next two years. And putting that same purchase on credit can double or even triple the price if you don’t pay it off right away.
“Taking on debt just to get a deal is never a good idea,” says Jeffrey Schwartz, executive director of Consolidated Credit. “The buy now pay later approach to holiday shopping may seem appealing today, but the added costs can give your finances a bad case of frost bite.”
“On the surface, financing may seem like the more affordable option, but consumers need to do their math and figure out what this purchase will cost them in the long run,” adds Schwartz.
As an organization that is dedicated to empowering consumers and helping individual and families overcome problems with debt, Consolidated Credit offers these tips to help consumers avoid the lure of holiday financing and keep their budgets merry and bright.
- Santa should stick to a budget – If you have set a holiday budget, be sure to stick to it. This means if that big ticket item – the new gaming system or the big screen TV – is not in your budget, you will either have to forgo the gift or cut other expenses from your list.
- Wise men leave the plastic at home – The easiest way to avoid doubling or even tripling the cost of your holiday purchases is to leave your credit cards at home. By avoiding the plastic, you can avoid post-holiday buyer’s remorse.
- Don’t deck the halls with credit card and financing offers – Retailers across the country will be offering special discounts if you open a new credit or financing account over the holidays. While these offers can be tempting, they are a big threat to your finances and could end up increasing your holiday costs.
- Celebrate with Cash- To avoid holiday debt, stick to cash this Christmas. It’s impossible to spend next year’s money when you can only shop with the cash in your wallet.
- Be Scrooged – Don’t be afraid to get a little Bah Humbug this year. If that big-ticket item is just not in your budget, scratch it off the list and consider other gifts that are better suited to your current financial situation.