Saturday, December 16, 2006

Unbelievable Credit Rate Hikes For Poor Christmas Shoppers

Incredible credit rate hikes lie in store for the poor and vulnerable who
wish to borrow to make their festive season a happy and memorable one. The
festive are generally a time for genuine profit for all businesses and in
fact, some shops will admit to making most of their profits around this
time. This includes credit card companies, banks and above all loan sharks.
For the lucky ones who have some form of savings or have saved towards this
season, there are no worries.

However, for those who have no savings but intend to borrow to enjoy the
festive season, things can get tricky if not costly, much later one. First
of all, there are many spend-now-pay-later schemes not to mention
buy-now-pay-later offers that saturates the market this season. In fact, one
UK company, Shopacheck, is offering vouchers from major brand name shops and
those interested do not have to pay a dime until the New Year.

Sounds like a very good idea at first, as you can instantly obtain all your
festive hampers without breaking any sweat. All you need to do is spread the
cost over a certain period. Now here's where the catch is: sky-high interest
of historic proportions. For instance, a borrower of 400.00 ($790.00) will
end up paying around 550.00 ($1050.00) this well over 70% interest! Someone
repaying this at a rate of 5.00 ($9.00) a week will not finish paying for it
by next Christmas.

In addtion, we should not forget that voucher companies like Shopacheck buy
theie goods at wholesale prices. Thus, not only are they making money
reselling them, they are raking in even more profits with the
spend-now-pay-later scheme. This is in the wake of the collapse of a well
known Christmas hamper company, Farepak, just before Christmas, which left
some unease in these Christmas Clubs who seem to think of themselves rather
than their clients who save hard-earned money throughout the year in the
hope of celebrating the Holidays in style.

Needless to say, the big brand-name shops whose vouchers are being sold in
this scandalous way have sought to distance themselves. Some say Shopacheck
is buying it through an agency, others deny being connected to them at all
while some have offered to investigate this further. As for Shopacheck, they
claim they are not doing anything against the law and that customers know
exactly what's on offer as they do not hide anything.

Without a doubt, this proves that the onus is on the consumer to be weary of
any credit provider especially during the festive season when one is wont to
forget the details and consequences in the whirlwind of activities.
Borrowing can be a good idea especially if you are able to pay it off within
a short time. Missing payments, on the other hand can severely affect credit
rating and therefore your ability to borrow for important things like a home
or a car.

To reduce debt or avoid it altogether this season can be tricky if plans
were not made earlier. Nevertheless, it is best not to use credit card for
festive shopping unless you have to. Debit cards are far better. Should you
use your credit card, then it will be good to pay it off when the next bill
arrives or as quickly as possible to avoid paying any interest. There is
still hope however, if your credit is totally messed up, credit fix is
available as the last resort to improve credit history.


About The Author: http://www.cheap-credit-cards.org
http://www.cheap-credit-cards.org/credit-cards
http://www.cheap-credit-cards.org/insurance

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