Putting Christmas on Credit Could Cost You – WSMH-TV/FOX – Flint/Saginaw, MI

(SAGINAW, MI – November 10, 2015) Your credit card’s interest plan might sound like a money-saver: 0 percent interest seems like a great deal. However, sometimes, that deal isn’t so sweet, and you could be forced to pay hundreds of dollars more than expected. Be wary of putting Christmas on credit.

With the holidays just around the corner, credit card companies are going to be eager to help you pay for your gifts and goodies.

“I do a lot of online shopping looking for the deals there,” said Heather Stolp, an SVSU student who is already prepping for Christmas.

Stolp says she uses a credit card to help pay for holiday gifts.

“I’m big on budgeting on a credit card but I always have the money to pay it off right when it’s due,” she said, which important when it comes to putting Christmas on credit.

“That’s the message I give, read the fine print,” said Midea Porterfield, Financial Counselor, CCCC with GreenPath, Inc. in Saginaw Township.

Here’s why she says that fine print is so critical: you hear 0 percent interest and think, “great, what a bargain!” However, if it’s a card with deferred interest, 0 percent isn’t exactly 0 percent. With a deferred interest card, you won’t owe any interest for a set period of time, usually six to 12 months.

However, if you’re even one dollar late after that six or 12 month period, you will have to pay interest on the entire, past balance of the credit card, even if you’ve already paid that off.

“If you require a payment and they’re late on those payments, they can recall all of those, recall all of the amount due,” Porterfield said.

However, it’s not all bad. If you pay off your balance within that six or 12 month period, deferred interest is kind of like interest-free money.

Still, Porterfield says to be really careful. If something happens and you can’t make a payment, you’ll be on the hook.

“A lot of consumers look at it as if they’re getting a great deal, but you really want to make sure to calculate in there if you aren’t able to pay this on time how much would you really be paying,” Porterfield said.

It’s important to note, there are credit cards that offer no interest for a certain time-period, and they don’t start charging interest until after that period ends.

That’s why it’s so important to know exactly what you’re signing up for before you get a financial holiday headache.

Watch the entire interview here: