1. Money
Justin Pritchard

Shopping Costs More when Borrowing with Credit Cards

By November 28, 2012

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Using a credit card to fund your holiday shopping this year? Make sure you know exactly how much it will cost you. If you don't pay off your credit cards in full each month, you're probably spending more on gifts than you realize.

Even if you pay off your card within 6 months, it's easy to spend more than you expected -- you can easily blow out your budget if you consider interest expenses. When you borrow with a credit card, you should expect to add at least a few dollars per month to the cost of everything you buy; you'll keep paying those costs until your balance is paid. The more you borrow, the higher your interest costs will be.

Sometimes it's nice to see some actual numbers, so The Consumerist demonstrates how this works using a hypothetical $900 credit card balance. Understanding interest costs can help you decide how much to spend while you shop, and it can help you understand the benefit of paying off credit card debts.

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