Credit management can be challenging for some who plan to use credit cards and other programs to fund holiday purchases. It’s common to overspend on gift giving and the rise of Buy Now Pay Later (BNPL) program participation can be tempting, but risky.
BNPL programs benefit businesses but can be adverse for customers. Be proactive in creating a holiday spending plan before you make your first purchase.
Before you begin adding extra holiday expenses, take the time to create a mindful and intentional plan. Credit cards and BNPL programs can be helpful tools, but it is essential to know your limits. Use credit tools to your advantage; don’t let them use you.
Find the programs and tools that work best for you and your unique situation. This process can be very complicated and overwhelming. Taking home your gifts now is appealing, but you need to understand program fees and terms first. Putting off payment may end up costing you significantly more than you thought. Work with a financial advisor to better understand your situation and options.
The holiday season can be a good time for young adults to establish their credit. Small purchases paid in full and on time help build credit.
A prevailing credit management misconception is the length of time it takes to build credit. You establish credit the minute your account reports to a credit bureau. Proactive management maintains good credit. Overspending and missed payments contribute to lowering credit. Poor choices and improper use of credit tools results in financial situations that can take years to repair.
Young adults often work with family or other trusted mentors, such as financial advisors, to learn good financial habits and create financial plans. Creating a good foundation of financial knowledge can prevent poor choices and avoid the consequences of overspending.
Good Life Asset Strategies serves a wide range of clients. It is our mission to help you reach your goals. We provide advice for clients at any point in their wealth accumulation journey. From individuals of all ages to businesses and trusts, our advisors have the knowledge and experience to create customized financial plans for the most complex situations.
Contact us today to create a plan that keeps you on track to reach your goals, including identifying holiday or other expenses and how they fit into a realistic budget, managing assets, and planning future wealth management.
Schedule a complimentary 30-minute consultation.