Why Celebrating Christmas on Credit is a Bad Idea
With the holidays almost upon us, it often means taking trips to visit family, purchasing gifts, going out to celebrate with friends or even a combination of all of the above. If you don’t have much in the way of savings set aside, you may be asking yourself how you’ll be able to pay for it all.
The above-mentioned scenario has resulted in several lending institutions now offering holiday loan products to clients. However, it’s crucial to remember that these are nothing more than unsecured personal loans being marketed under a different name. While this may seem like the answer to your holiday finance problem, there are many reasons why you should never succumb to celebrating Christmas on credit – especially this form of credit.
Discretionary Spending is a Bad Reason for Borrowing Money
When you opt for using a holiday loan, you’ll end up paying a high amount of interest for items that you want, but don’t truly need. Regardless of whether you have an excellent credit score or not, obtaining a holiday loan or even maxing out your credit cards will put you in a more difficult financial situation than ever when January arrives.
You’ll be Making Christmas Even More Expensive
Although purchasing gifts and everything else you’ll need to celebrate Christmas on credit may seem like it will be extending your buying power, the truth is that your buying power will actually be decreased and gift giving will become unnecessarily expensive.
When borrowing money, you’ll spend more than you would have if you limited yourself to the cash you have on hand. To add insult to injury, the money you borrowed will have to be repaid with interest as well – making your so-called Christmas celebration costlier than you imagined.
Borrowing Helps Set Unrealistic Expectations
If you ‘do Christmas on credit’ this year, you’ll be helping to set unrealistic expectations with regards to gift giving and general spending for the years to come. It will also make you a lot more likely to depend on credit for the next Christmas…and the one thereafter.
Borrowing to pay for Christmas will also not only get your children into the habit of expecting large and costly gifts each year; you’ll be teaching them that it’s OK to borrow money so that you can have what you want when you want it – not a good idea.
The Joy of Giving will be Stolen because of Borrowing
Although your kids will be thrilled to open their gifts on Christmas morning, you won’t be able to truly enjoy the moment because deep down, you know that it’s going to be difficult to repay the amount you borrowed to buy them. You’ll also experience feelings of guilt because you know that those gifts will only really belong to your kids once your borrowing has been fully repaid.
Instead of succumbing to putting your Christmas spending on credit again this coming year, commit to saving some money each month. By the time December arrives, you’ll have a tidy sum saved up and be able to enjoy a guilt-free celebration.