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Show Shopping made easy Credit brews trouble The pressure to spend is probably never greater than during the holidays. But for customers who already have trouble controlling their credit usage, Christmas , shopping is like being on a diet and keeping snack food on hand. "If you see it, you want it, so stay away from temptation," says consumer specialist John R. Burton from the University of Utah. "And people have a lot of ways of rationalizing unnecessary and extravagant purchases; . 'on sale' is the worst one. Sales are often quite illusionary because goods were almost never sold at the higher price to begin with. But telling yourself you got a good deal is a way to rationalize a desired purchase." Credit . makes Christmas shopping particularly convenient and many stores make charging even more convenient by delaying billing until February. "You still have to pay for it and the interest charges during that period," says Burton. Dr. Afesa Bell-Nathaniel, Bell-Nathaniel, chairperson of the Family and Consumer Studies Department, cautions against going into Christmas on credit. "There is a psychological ease to spending on credit," . she says, "but there is a trade-off. You have the momentary pleasure of an instant purchase along with the burden and anxiety created with bills you don't want. If you can't pay for it now, how will you pay for it later?" "Credit provides an opportunity for immediate satisfaction," adds Burton. "Supposing I see a compact stereo system for $200 and I want it right away, but I'll have to buy it on credit. The credit rate is, say, 25 percent. I may end up paying an extra $50 just to have that thing now. With that $50 1 could buy six or eight good albums. Because I'm having the stereo now, I'm giving up the satisfaction of six or eight albums. In a way, the use of credit reduces your standard of living because when you reach your credit line, your purchasing power becomes very inflexible. You can't take advantage of good buys later on because you're at your limit." Both Bell-Nathaniel and Burton note that people fail to label a charge purchase as a loan, which it really is. "Supposing you had to go to a credit office and ask for a $50 loan," says Burton. "Then after you got the $50, you could go to the department store and make your purchase. Would you still make that purchase?" He urges consumers tc limit their credit care usage by making ii. inconvenient to use their cards. "Leave them at. home and only use them when you have to gc home and get them," h suggests. "That puts a time and inconvenience element into shopping with credit. For myself, I usually find that if I can put off a purchase for a few days, I probably won't buy." Bell-Nathaniel says that even once a purchase has been made there is often the possibility of returning the item. Most stores have . return policies for non-used and non-damaged items. Of course, credit is not always bad. "It's realistic if you know how to handle it," says Burton. "But you know you're in trouble if you're continually at your credit line and paying only the minimum balance." |
