Incredible credit rate hikes lie in store for the poor and vulnerable who wish to borrow to make their festive season a happy and memorable one. The Christmas Holidays are generally a time for genuine profit for all businesses and in fact, some traders will admit to making most of their profits around this time. This includes credit card companies, banks and above all loan predators. For the lucky ones who have some form of savings or have saved towards this season, there are no worries. However, for those who have not prepared but intend to borrow to enjoy the Christmas season, things can get tricky if not costly, much later one. First of all, there are many spend-now-pay-later schemes not to mention buy-now-pay-later offers that floods the market this season. In fact, one UK company, Shopacheck, is offering vouchers from major big name shops and customers do not have to pay a dime until the following Year.

Sounds like a very good idea at first, especialy when can instantly obtain all your festive hampers without breaking the bank. All you need to do is spread the cost over a certain period. Now here's where the catch is: sky-high interest of historic proportions. For instance, a borrower of 400.00 ($790.00) will end up paying around 550.00 ($1050.00) this well over 70% interest! Someone repaying this at a rate of 5.00 ($9.00) a week will not finish paying for it by next Christmas.

To add to this, the Shopacheck obtains these vouchers at a discount which means they make a profit just by selling it without the interest charged. This is reminiscent of the collapse of the Christmas Hamper Company Farepak, just in November, which left its clients high and dry with a miserable Holidays to look forward to. The irony is that, some of these forlorn Farepak consumers have been contacted by Shopacheck and encouraged to buy shop vouchers.

Needless to say, the big brand-name shops whose vouchers are being sold in this scandalous way have sought to distance themselves. Some say Shopacheck is buying it through an agency, others deny being connected to them at all while some have offered to investigate this further. As for Shopacheck, they claim they are not doing anything against the law and that customers know exactly what's on offer as they do not hide anything.

Without a doubt, this proves that the onus is on the consumer to be weary of any credit provider especially during the festive season when one is wont to forget the details and consequences in the whirlwind of activities. Borrowing can be a good idea especially if you are able to pay it off within a short time. Missing payments, on the other hand can severely affect credit rating and therefore your ability to borrow for important things like a home or a car.

Some of the tips to prevent getting into debt during the holidays, include saving a percentage of monthly income for to meet the festive and holiday season costs, using a debit card instead of a credit card for regular spending, drawing up a budget and sticking to it and most important of all, keeping your spending in concert with your income.


By Ian Iowek Credit Repair Advisor
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