October has a lot of retailers offering special discounts.
Before you fall into the trap of exciting offers, 7 On Your Side has tips to stay out of debt.
When you're in the store, it's enticing at checkout to be asked if you want to save 15% by opening a store card.
If you're shopping online, there is an option to buy now and pay later to break up payments.
If you're not careful, bills can wind up costing you.
A recent survey shows 1 out of every 3 people regret signing up for a store credit card.
If you are the type of person who shops at a certain store regularly and pays off balances every month, store credit cards have their benefits.
You can get discounts, rewards and early access.
The cons are that sky-high interest some as high as 26% on average, are always higher than on regular credit cards.
"Oftentimes if there's any underlying balance you can hit with really high interest and that's how these companies make money essentially. If you're only going to shop at the store once, I would argue the store cards don't make sense because of the risk of long-term debt," Wealth Strategist at UBS, Jordan Ricciardi said.
Buy Now Pay Later works a bit differently. Instead of paying the store for a purchase, the BNPL provider pays the retailer for you.
And then you pay back the BNPL loan over a few weeks or months, whatever the pre-set repayment schedule says.
Generally, you pay back in 2 to 4 installments that are taken directly from your debit card.
One of the big pros, unlike credit cards, is that it's usually interest and fee-free.
Plus, it's much easier to be approved for this type of financing even with a low credit score.
The cons with BNPL are that they come with late fees if you don't pay on time. So, understand the repayment terms
"Which can up to 36 percent interest if not paid on time, which is pretty astronomical, that can keep you in a trap because it keeps growing because the balance is so high," Ricciardi said.
Look for store cards that pays you back with a sign-up bonus and cashback on from a retailer where you intend to shop a lot.
With BNPL, you will miss out on rewards points and cash back that shopping with credit cards offers.
----------
SHARE YOUR STORY
Do you have an issue with a company that you haven't been able to resolve? If so, 7 On Your Side wants to help you!
Fill out the form below or email your questions, issues, or story ideas by filling out the form below or by emailing 7OnYourSideNina@abc.com. All emails MUST INCLUDE YOUR NAME AND CELLPHONE NUMBER. Without a phone number, 7 On Your Side will not be able to respond.