Many consumers are planning on spending more coin this holiday shopping season amid supply chain issues. Here's how consumer behavior may alter the way you finance holiday expenses. ( iStock )

This twelvemonth, holiday shoppers are planning on spending more money, shopping earlier and trying new retailers as a result of possible inventory shortages, according to TransUnion'due south 2021 Consumer Vacation Shopping Written report.

About three in four consumers are considering rethinking their holiday shopping strategy amidst supply chain problems — a third of survey respondents (33%) are shopping earlier this year, a quarter (25%) are considering alternative gifts and xiv% may make fewer vacation purchases.

Compared to terminal yr, there's a 22% increase in the number of respondents who want to spend more on holiday shopping in 2021 after ii consecutive years of reject during the coronavirus pandemic. Additionally, 15% more than consumers program to use credit for their purchases.

If you lot're planning on borrowing coin to finance holiday purchases, it'due south important to compare your options. Proceed reading to learn more than about putting seasonal expenses on credit, and compare your options for credit cards and personal loans on Apparent for free.

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3 ways to borrow money for holiday shopping

The best fashion to pay for discretionary expenses on your shopping listing is to upkeep and save up in advance, simply the holiday flavour has a style of sneaking up on even the most proactive consumers. Before you know information technology, it'south November, then Blackness Friday — and December is right around the corner.

If you're planning on borrowing money to pay for Christmas gifts, Thanksgiving dinner or airplane tickets to visit family, consider these options:

  1. Open a credit carte du jour with an intro 0% APR offer
  2. Use a buy at present, pay later service
  3. Borrow a fixed-charge per unit holiday loan

Learn more about each financing plan in the sections below.

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1. Open a credit menu with an intro 0% APR offer

Putting holiday purchases on a credit bill of fare tin can be a quick mode to rack up more high-involvement debt than you lot can repay. The average interest rate on credit card accounts assessed interest was 17.13% in Q3 2021, according to the Federal Reserve.

However, it may exist possible to forego paying interest altogether if you lot can open up a credit card with a 0% April introductory period. These offers are reserved for creditworthy borrowers with good credit scores — that'southward a score of 670 or higher using the FICO scoring model.

Nil-interest purchase periods typically concluding 12, 15 or 18 months. When the offer expires, the credit menu issuer will charge interest on the remaining rest. But if y'all're able to meticulously plan your holiday expenses, it'southward possible to pay off the balance you accrued well before the 0% APR menstruum ends.

Visit Credible to compare interest rates, terms and offers across credit carte issuers — some of which may offer a 0% April menses. Viewing offers will not impact your credit score.

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2. Utilize a buy now, pay later on service

If yous're part of the vast majority (83%) of consumers who plan to practice at to the lowest degree half of their vacation shopping online this yr, per TransUnion's survey, then you may be familiar with a growing financing option called "buy now, pay afterward" (BNPL). This service offered at checkout allows shoppers to break their purchases into multiple installments over a gear up repayment plan.

This financing option has its upsides: Many BNPL companies don't require a credit check or even charge interest. Plus, BNPL financing is bachelor at checkout through many major online retailers like Amazon and Walmart, making it an accessible and convenient option.

Yet, BNPL does come with its drawbacks. Some companies, such as Assert, charge upwards to 30% APR as part of their financing agreements. Most companies volition charge belatedly payment fees and may even study yous as delinquent to the credit bureaus if you don't pay on time.

Holiday shoppers who program to utilize buy at present, pay later to finance their purchases should carefully read the terms and weather of the payment plan to avoid fees, excess interest and negative credit impacts.

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iii. Borrow a fixed-rate holiday loan

A vacation loan is another proper noun for a personal loan that's used to finance holiday expenses. Personal loans are lump-sum loans that y'all repay in stock-still monthly payments over a set menstruation of time.

Compared with credit cards, personal loans take low, fixed interest rates and predictable payment plans. Whereas credit cards have an boilerplate interest rate of 17.xiii%, the boilerplate rate on a ii-year personal loan is 9.39%, per the Fed.

You can likewise consider using a personal loan to consolidate credit menu debt you lot've accrued over the holidays. A contempo Credible assay establish that creditworthy borrowers have the risk to save virtually $2,400 on interest by consolidating their debt into a personal loan.

View your estimated personal loan interest rate for free on Credible, and use a personal loan calculator toestimate your monthly payment.

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Have a finance-related question, only don't know who to enquire? Email The Apparent Money Expert at moneyexpert@credible.com  and your question might be answered past Credible in our Money Expert column.