Buy now, pay later. While it sounds like a great idea at the time, the consequences aren’t so great. You end up paying much more than the original purchase price and depending on how much you charged on your credit card, it could take months or even years to pay off those charges.
So what will you pay?
To calculate your total debt and interest payments, use the Scrooge-O-Meter
Here’s what you will need:
- Total balance of each credit card
- Annual Percentage Rate (APR) of each credit card
- Minimum monthly payment
Okay, now what?
You figured out what your holiday charges will cost you if you make only the minimum payment. Now it’s time to take action. And the good news is you have options and support available (for free!) if you need it. Here are some options:
- Go into crisis budgeting mode to cut costs, allowing you to make higher than the minimum payment on your card(s).
- Meet with a financial counselor to review your overall financial situation and debt repayment options.
- Use the power pay method to pay off debt faster.
- Sign up for a DMP.
- Call your creditors to see if they’re willing to reduce interest rates or can offer you an internal hardship program.
These are all viable options…and sometimes it’s better to implement more than one at the same time. And it can’t hurt to just see if a DMP is right for you. It helps you pay off debt faster, save money, and simplifies things by consolidating your credit card payments into one payment with one due date.
Regardless what direction you take, don’t wait. The longer you wait to take action, the more in interest you’ll pay and it will take longer to pay off your credit card charges. If you want non-judgmental, action-oriented advice to help you make your decision, call us at 888.577.2227 for your free session. Or, you can click to GET STARTED ONLINE at your convenience.
Written by Elaina Johannessen, Program Director with LSS Financial Counseling.