Often times when shopping for the people we love, we fail to realize the true cost of purchasing with credit cards. Let’s take for example, Jimmy excels in sports and this holiday season you want to encourage his athletic ability by buying him that Nike Air gift pack for $278.00, realize that if you have an average APR of 10% and pay $100.00 on your credit card bill, that Nike air gift pack will actually cost you $285.00 dollars. You’re probably thinking, big deal it is only $7.00 difference.
But it’s the holidays, and we can’t forget about our little fashion icon and celebrity wannabe Susie who wants the new Jessica Simpson weekend back for $142.00 and she desperately needs to the new Ipod shuffle for $199.00. So retail price alone, including Jimmy’s Nike Air back you are looking at $619.00 so far.
Don’t forget Johnnie. He wants the walking, talking Elmo for $162.00. How can you resist his whining and crying? You can’t. But you don’t stop there. Christmas is about giving and the more the better, so you buy a Nintendo Wii for the kids to share for $159.00. And as your shopping through the mall you are blinded by a wall of color. Gap sweatshirts for all at $50.00 a piece you are talking another $150.00. Now you are looking at a total spending spree of $1090.00 on your credit card.
Taking the average APR and monthly credit card pay off listed above your total spending for Christmas is $1204.00. Congratulations you have spent and additional $114.00 and at $100.00 dollars a month credit card payment, your 2008 Christmas shopping spree will take you until Christmas 2009 to pay off. That is priceless. And that does not include fees, additional purchases throughout the year. Merry Christmas you’ve got debt. That’s the price of love, right?For more information on how you can see the real cost to your spending. Check out Quicken’s real cost calculator
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