Christmas cards?
Experts advise shoppers to say “no” to retail credit cards.
Waccording to a survey of 1,000 U.S. adults for Los Angeles-based Swagbucks rewards and loyalty program by its operating company Prodege LLC. Fifteen percent of respondents said they incur $250 to $500 in debt; 8 percent incur more than $1,000. Fortunately, Swagbucks found 72 percent of shoppers pay with cash or debit cards, and of the debtors, 32 percent pay off their bills in less than a month; another 32 percent settle them within three months. That’s good news because if you don’t quickly pay debts, that $500 charge on a store credit card — with say a 21 percent APR — will take you 10 years to pay off, if you make only minimum payments. What’s more, you'll spend another $700 in interest. And that's if you don't charge more to your card. Meanwhile, carrying a balance of more than 50 percent of a credit line ($250 on a $500 limit, for example) can pull down scores, and a single late payment can drop a score 120 points. ould you like to open a store credit card and save X amount on your purchase today? Say “no” to this question these next few weeks while you’re finishing your Christmas shopping. Store-only credit cards currently carry a whopping average annual percentage rate (APR) of 27.23 percent, compared with a 20.82 APR for the average general purpose credit card, which typically offers more lucrative sign-up bonuses and ongoing rewards. Yet about half of Americans have applied for retail credit cards, including 94 million who impulsively signed up at checkout. That’s according to Austin-based CreditCards.com, which looked at 81 cards from 58 retailers, in conjunction with a telephone poll of 1,506 consumers by SSRS. Brandsource (30.49 percent) charges the highest APR, while Big Lots, Staples, Zales and Discount Tire all charge 29.99. Thirty-six retail cards offer a deferred interest period — a reduced rate for commonly six months. This type of promotion comes with a catch: Any balance carried after the six-month introductory period results in retroactive interest being charged on the initial balance. Zero-percent offers from generalpurpose cards are more consumerfriendly, and have introductory periods for as long as 20 months, CreditCards.com industry analyst Ted Rossman points out. In those cases, only the balance left after the promo period ends would be charged interest moving forward, Rossman said. Oklahoma City residents will spend an average of $612 this holiday, according to wallethub.com, a personal finance website. Meanwhile, 63 percent of Americans go into debt during the holidays,
Based on Oklahoma's median household income ($50,051) and average household credit card debt ($8,197, including $1,901 in retail credit card debt), Sooners already have the eighth-highest credit card debt burden nationally, according to a report released Monday by CreditCards. com. Setting aside the 15 percent of earnings recommended by experts to pay down debt, it would take 15 months to pay off the debt, including $1,181 in interest.
Not surprisingly, parents are the biggest culprits of overspending at the holidays.
According to a recent T. Rowe Price survey, 45 percent get everything on their kids’ lists, which makes parents much more likely to charge their holiday spending and go into debt. Fifty-nine percent admit spending more than they should have.
Oklahomans have the eighth highest credit card debt burden nationally. Setting aside the 15 percent of earnings recommended by experts, it would take 15 months to pay off the debt, $8,197, and the $1,181 in interest charges.