Think twice before you swipe.
Part of the draw of credit cards can be their ability to extend your spending power. This can be especially helpful in cases where you may need a little more time to pay off a necessary or planned expensive purchase. However, experts caution that you shouldn't swipe or tap on the sale without a clear roadmap of how you're going to pay for it.
"While using a credit card to purchase a big-ticket item can be tempting, you'll want to consider the long-term cost of carrying that debt," says Hazell."For example, if you purchase a $5,000 item with a credit card that has an 18 percent interest rate and you only make the minimum payment each month, it will take you nearly 10 years to pay off the balance—and you'll end up paying nearly $3,000 in interest.
"Impulse purchases can be tempting, but they can also be a source of financial trouble. When you make an impulse purchase with a credit card, you may not realize how much that purchase is really costing you until you receive the bill," cautions Owen."By avoiding impulse purchases and using cash instead, you can help ensure that your credit card is used for purchases that you have planned for and can afford to pay off.
Best Life offers the most up-to-date financial information from top experts and the latest news and research, but our content is not meant to be a substitute for professional guidance. When it comes to the money you're spending, saving, or investing, always consult your financial advisor directly.Zach is a freelance writer specializing in beer, wine, food, spirits, and travel. He is based in Manhattan.
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