As Christmas draws near, you, like many others, might find yourself a bit short of funds. While many people pull out their credit cards to pay for anything they buy around the holidays, Christmas loans might be a better choice.
We know that Christmas comes each and every year at the same time – December 25, right?
So why is it that very few people prepare for it? Buying gifts throughout the year or setting up a Christmas fund would be the ideal choices, but Christmas tends to sneak up on people anyway – it’s tricky like that!
Don’t let Christmas spending get away from you. (Photo Credit to Brad_Chaffee on Flickr)
Choosing Christmas Loans or Credit Cards
Let’s get down to the basics of whether you should choose a Christmas loan or a credit card to do your Christmas shopping this holiday season.
We all know what a credit card is, but do you know what Christmas loans actually are? The title ‘Christmas Loans’ is a specific name given to personal loans used for, well, Christmas.
There are many advantages of choosing a Christmas loan instead of credit card. The first is that Christmas loans have lower interest rates that are usually fixed. Since the interest rates are lower, it normally means the monthly payment will be smaller as well. When you choose this type of loan, you also know how many payments you will have and how long it will take you to pay it off unlike credit cards where it will take years to pay off with high interest rates.
By choosing to pay off the loan within the year, you will be able to pay it off before taking out a Christmas loan the following year. This allows you to pay small payments throughout the year instead of a large lump sum out of your pocket during the holidays or paying on it for years when you choose a credit card.
Setting a Budget
When you decide on a Christmas loan instead of a credit card, you will be setting a budget whether you realize it or not. Let’s say you decide to take out a loan for $1500. When you use this money only for Christmas toys, decorations, or anything else associated with Christmas costs, you know how much you have to spend and you’ll always know how much you have left.
Once the money is gone, stop buying. It will take a little bit of budgeting to spend only the amount the loan is for, but you can do it. Many people do.
The one down-side to Christmas loans is that once you have the money in hand, it can be spent on anything you wish. The bank has no way of knowing how you spent the money. They are only concerned that you pay back the money. If you choose a loan, be sure to only spend it for Christmas expenses.
When Should You Get a Christmas Loan?
There is no set date to take out a Christmas loan. Some people begin shopping in September, while others don’t start until after Thanksgiving. What kind of shopper are you? Do you start early or are you a procrastinator?
