Savings from Black Friday and Cyber Monday shopping deals could slip away if pay by plastic at checkout and let your balance linger longer than the next billing statement.
“The big thing about Black Friday is the retailers and the credit card companies want you to go out and spend your money, says Chuck Troiani, a Lowcountry financial analyst. “And, its not always a good deal, because from the statistics I’ve seen, the majority of people go out and spend over their budget.”
Budget busting is just one splurge in the holiday shopping hangover cocktail.
“Twenty-five percent of those that are spending that money on their credit card take 90 days or better to pay it off at high interest rates usually from 18 to 25%,” says Troiani. “So, that deal isn’t as good as they thought it was.”
The financial technology company, Affirm, completed a survey of shoppers and found that 25% of holiday shoppers hope to pay off their seasonal spending debt with their tax refund.
Even if they accomplish their goal, the spending splurge comes with another type of pinch, says Trioani.
“They came up with that terminology “holiday blues” for a reason, and that’s because 80% of the people who go out and the 40% who blow their budget have some sort of regret afterwards that gives them stress and a holiday blues feeling.”
Trioani offers this shopping advice, “I would recommend that they make a budget and try to stick to it as hard as that is. If they do incur credit card debt and use their credit card then to pay it off in 30 days and try to keep the money in their pocket. And have a stress free or less stress holiday season.”
And, “If they gave it a little bit more time instead of getting caught up in the excitement and exuberance of Black Friday, they might save even more money, a couple of weeks down the road. Some of the best sales you can get are after Christmas as retailers try to move that residual inventory and they’ll have further and deeper discounts as high as 80%. So it pays to wait and keep the money in your pocket.”