Spending

More Americans are considering opening credit cards for vacation spending

Americans aren’t letting exorbitant interest rates deter them from using credit cards. More people said they were ready to get new store credit cards this winter, compared to last year.

According to new research from Lending Tree, 35% of Americans said they were at least somewhat likely to ask for a store credit card this holiday season. That’s up from 29% in 2021.

Store credit cards may offer some benefits to retailers, but they often come with higher interest rates and can usually only be used at that specific store.

The higher interest rates are the result of store credit cards being available to all shoppers, regardless of creditworthiness.

LendingTree found that 37% of people who took out a store credit card in the past regretted the decision. About 14% of them say it has happened to them several times, according to the data.

It is recommended to shop around before committing to a new map. Try not to open one in the heat of the moment while it’s offered at checkout.

However, if you shop regularly at a store like Amazon, for example, the Amazon Prime Store Card offers a 5% discount on everything you buy.

Due to inflation, families have less disposable income and are turning to credit cards to supplement. As credit card interest rates rise, so do balances.

Lamar Person, financial counselor for the nonprofit Consumer Education Services, said anyone can set a budget to get their financial situation under control.

He said the fastest way to get out of debt is to find out which credit card has the highest interest rate, then throw away as much money as possible to pay off that card first.

“Most people spread their money around and try to pay a little on everything,” Person said. “It’s the wrong way to go if you’re trying to get out of debt as quickly as possible. Once it’s paid off and you’ve eliminated that payment, you take that money and apply it to the next one.

Don’t neglect your savings. Keep putting money aside for a rainy day, and if you need to keep a balance because life is tough right now, try not to go over 30% of your limit.