Unbelievable Credit Rate Hikes For Poor Christmas Shoppers
Incredible credit rate hikes lie in store for the poor and vulnerable who wish to borrow to make their festive season a happy and memorable one. The festive are generally a time for genuine profit for all businesses and in fact, some shops will admit to making most of their profits around this time. This includes credit card companies, banks and above all loan sharks. For the lucky ones who have some form of savings or have saved towards this season, there are no worries.
However, for those who have no savings but intend to borrow to enjoy the festive season, things can get tricky if not costly, much later one. First of all, there are many spend-now-pay-later schemes not to mention buy-now-pay-later offers that saturates the market this season. In fact, one UK company, Shopacheck, is offering vouchers from major brand name shops and those interested do not have to pay a dime until the New Year.
Sounds like a very good idea at first, as you can instantly obtain all your festive hampers without breaking any sweat. All you need to do is spread the cost over a certain period. Now here’s where the catch is: sky-high interest of historic proportions. For instance, a borrower of 400.00 ($790.00) will end up paying around 550.00 ($1050.00) this well over 70% interest! Someone repaying this at a rate of 5.00 ($9.00) a week will not finish paying for it by next Christmas.
In addtion, we should not forget that voucher companies like Shopacheck buy theie goods at wholesale prices. Thus, not only are they making money reselling them, they are raking in even more profits with the spend-now-pay-later scheme. This is in the wake of the collapse of a well known Christmas hamper company, Farepak, just before Christmas, which left some unease in these Christmas Clubs who seem to think of themselves rather than their clients who save hard-earned money throughout the year in the hope of celebrating the Holidays in style.
Needless to say, the big brand-name shops whose vouchers are being sold in this scandalous way have sought to distance themselves. Some say Shopacheck is buying it through an agency, others deny being connected to them at all while some have offered to investigate this further. As for Shopacheck, they claim they are not doing anything against the law and that customers know exactly what’s on offer as they do not hide anything.
Without a doubt, this proves that the onus is on the consumer to be weary of any credit provider especially during the festive season when one is wont to forget the details and consequences in the whirlwind of activities. Borrowing can be a good idea especially if you are able to pay it off within a short time. Missing payments, on the other hand can severely affect credit rating and therefore your ability to borrow for important things like a home or a car.
To reduce debt or avoid it altogether this season can be tricky if plans were not made earlier. Nevertheless, it is best not to use credit card for festive shopping unless you have to. Debit cards are far better. Should you use your credit card, then it will be good to pay it off when the next bill arrives or as quickly as possible to avoid paying any interest. There is still hope however, if your credit is totally messed up, credit fix is available as the last resort to improve credit history.