The Holidays are the Most Wonderful Time of the Year
(Unless They Ruin Your Credit)
It's that time of the year again ...
And that means the Holidays are here! Decorations, holiday songs, family gatherings, eggnog, parties ...
Like the majority of Americans, you've probably found yourself ... or will find yourself ... doing one or both of the following during the Holiday Shopping Season:
- Standing at a register in a store paying for a holiday purchase
- Making a holiday purchase online
And inevitably, you'll find yourself being asked at the time of check-out ... or at some later date via an email or text ... if you'd like to apply for credit at that store or online site. Some sort of "special discount", gift, or temporary low-interest rate will most likely be dangled in front of you as an enticement to action.
Now, I've written on this topic many times in the past. But I do so once again today because of its timely and great importance. Especially so, for those that have already entered the home buying/mortgage application process ... or those hoping to buy and finance in the next year or so.
As a Chicagoland - IL/WI loan officer, I've had the opportunity to view many Credit Reports. And I've seen large amounts of credit/debt that was initially established during the Holiday Shopping Season on those Reports. New debt that can produce huge credit ramifications for those looking to buy a home.
So I urge you ...
Take the time to think it over thoroughly ... whether it be at the cash register or while you're online.
Say "NO" to that new credit offer, unless you fall into one of the following categories:
- Your Credit/Credit Score can withstand the new credit inquiry
- You can handle the new debt and make monthly payments on time, consistently, and faithfully
- You are NOT making application for loan
- You are NOT already in the mortgage process
- You are NOT hoping to buy a home in the near future
- You are NOT maxed-out on present credit cards
- You have NOT already applied for other store/credit cards
- You know ALL the terms of the new credit account associated with the offer
- You know what other credit obligations you have and the total of ALL your debt
- The "enticement" offer is so valuable it offsets the negatives of taking on more debt
- You have NO credit history and are trying to establish one for a future home purchase
Retailers know and are counting on the fact that you are emotionally tied to making the purchase in-hand. And that you may possibly be under stress (emotional, physical, and financial) and time constraints to make that purchase. It's easy to fall prey.
But make no doubt about it: While the savings reaped on the initial purchase may be welcomed (and possibly substantial), the retailer is making that offer knowing thatthey will best the customer. If they didn't think they'd ultimately make money with the offer, they wouldn't be making it.
Retailers are not charitable organizations ...
So again, STOP. Take the time to pause and think things through. Will the new credit serve a good purpose for your finances and credit or cause future financial stress?
What will be most beneficial to you moving forward? The immediate savings or the more long-term ones? Then answer that salesperson or online inquiry accordingly ...
Contact me! I'll put my 40+ years of mortgage experience and expertise hard to work on your behalf.
I'm easily found at: