As you prepare for Black Friday and Cyber Monday, take a moment to consider how you will pay for your gifts. Consumers Union reminds us that:
- When you buy with a debit, rather than credit, card, you won't have as much limited-liability protection, the right to dispute a charge, to hold up payment, or withhold payment while in dispute.
- If you use PayPal and it is linked to your checking account/ debit card, the same lesser protections apply. It suggests changing your PayPal account to draw from a credit card, to get this extra level of protection. The same goes with Google Checkout. Some WalletPop readers have had poor results from PayPal's Buyer Protection feature, so if you depend on this program to backstop your purchases, I'd suggest reading the fine print carefully.
- Before you select a "Bill Me Later" option, consider that you're opening a new credit account, which will result in a "hard inquiry' to the credit bureau. A number of hard inquiries can drop your credit score and raise the interest rate when you finance a large purchase such as a car or house.
- Also, those "90 days same as cash" offers often carry a hefty interest rate penalty if the minimum payment is late.
Hopefully, you've been saving up your pennies all year and have money in hand for your holiday shopping. I'd suggest depositing it to your credit card account on the way to the mall. You can then use your credit card without worrying about running up debt, as long as you keep a running total of what you've spent. If you don't have a pocket calculator, put that at the top of your list!