Four out of 10 Americans will go into debt for the holidays. Beverly Harzog, credit cards expert at U.S. News & World Report, joined Cheddar News to discuss minimizing debt as the holiday shopping season approaches.

Four out of 10 Americans will go into debt for the holidays. Beverly Harzog, credit cards expert at U.S. News &amp; World Report, joined Cheddar News to discuss minimizing debt as the holiday shopping season approaches.

How to Approach Debt Ahead of the Holiday Shopping Season

holiday shopping season getting into full swing with black friday just around the corner but with persistent inflation, families have less to spend on gifts this year. And that in turn has become pricier than before. So joining me now is Beverly Hartzog, credit card expert and consumer finance analyst at U. S. News and World Report Beverly thanks so much for coming on the show. I know your recent survey showing that more than four in 10 Americans do you expect to go into debt this holiday season? Mostly by carrying balances on their credit cards? So what tips do you have to prevent this or minimize some of the impact? Yeah. And you know about two thirds even said that they were worried about being being able to pay for all of the holidays. Now one of the things you can do and you mentioned the buy now pay later and credit cards, what we found in the survey is that many were planning to use a combination and that could really lay Benjamin debt after the holidays. Now with credit cards. One strategy you can use if you really can't pay for to purchase this this year is going to 0% purchase a pr credit card now with that you'll be able to make a large purchase let's say you need to buy a pc for your teenager And you'll be able to spread out payments on that. So right now I'm seeing 0% purchase a pair of cards for about 12-21 months. So during that time you make payments and you don't have to pay any interest at all. So that's one good strategy you can use rather than carrying a balance on a credit card that's going to have a pretty high interest rate. Yeah I think that is good advice. What are some of the best ways to budget for the holidays and perhaps Beverly even some of the best times to shop with black friday on the horizon. You know most people this year said that they were going to shop in stores and online. And we also found that almost 40% say they're waiting until the day after Thanksgiving this year. And I compared that to last year's survey were only 12% were waiting I think last year more people were worried about supply and shortages and this year it's more about prices and saving money. So if you can wait until the day after thanksgiving you're going to find some really good deals. And I also suggest using the free app on your phone to do some comparison shopping. You want to see what store has the best price on the item that you are looking for? And as you're putting together that holiday budget be very uh thorough. Okay. Make a list of everything you know think about any entertainment. Are you having guests coming in? How much is that going to increase groceries? So you want to be sure that you're very thorough putting together the list and try to stick within a budget. The last thing you want is to be a debt next summer and have to cancel vacation. Yeah, that would be a bummer. Especially as the weather starts warming up Beverly. I do want to talk about some of these rewards cars because they can seem enticing right if you are going to spend a lot of money and uh the hook is that you get rewards back. That might seem like a good deal. But I do believe that in many cases they do carry some of those higher interest rates. Right. Well they do and that's really the key to using a rewards credit card to your advantage. If you don't carry a balance, the interest rate isn't going to matter where people get into trouble is that they'll use the rewards cards and then they'll think, oh, it's okay if I carry a balance one time, but then that can become your new normal. So you don't want to let that happen. Just don't go there. So be sure that you don't put more on that credit card then you can pay off each month. As long as you don't do that, you'll earn rewards and you can even redeem those for statement credits or for travel. You know, other things that you can use to help save money during the holidays. Right? And of course one key factor for consumers are looking to make purchases like buying a home or even taking out an auto loan is that credit score. And so for plans like buy now pay later Beverly what might that do to a person's credit score Now? That is a great question. You know the biden key later plants are so popular right now and where I've seen people get into trouble is when they do multiple versions of this. You know the terms are always a little bit different. You have to understand, you know, most of them will say well there's no interest rate and no fees but if you miss a payment, you know that can end up on your credit report and it also can shorten the amount of credit history you have and this is something we don't think about a lot. It's not a huge portion of your credit score but it does count. So if you do a lot of buy now pay later plans, it shortens your credit history a little bit. So even if you pay on time it could still whatever your score just a little bit. So is it worth it to get an interest free loan on a credit card Beverly and how might that actually work? Well you can do research online um and find the best card that works for you. And the important thing is with this card to, as I mentioned, you're going to make payments on it but you're not gonna pay interest if you pay it in full before the intro period is that's really the key, Another key is don't put other purchases on that card. Alright. It's going to be difficult to pay off. You know one balance is at 0% and then buying new purchases where it's going to be at a higher interest rate. And you want to be sure that your main goal with that 0% purchase a pr card is to pay off that one purchase without paying interest. That's how you get a deal with that. You basically get a short term interest reload. All right, Beverly hard dog credit card expert and consumer finance analyst at U. S. News and World Report. Beverly. Thank you.