Plan your purchases to avoid becoming overindebted
The tail end of the year is one of the periods where consumption rockets. Christmas shopping begins earlier each year (Black Friday, Cyber Monday, early winter sales, etc.) and we are encouraged to spend at every turn. Advertising is more targeted at our personal tastes, particularly online. And shopping has never been easier: on your mobile phone, from the comfort of your own home, you can access an endless catalogue of products and services.
The rise of online payments may lead to less control over our spending. Additionally, access to credit is becoming ever easier thanks to technological developments and to the emergence of new financial agents with innovative products. For example, it is now easier to go shopping without any money, since many physical and online stores allow payments to be deferred in several monthly instalments, even for very small amounts, with hardly any paperwork and, in many cases, interest-free. But beware. While you may be charged no interest, there could be an arrangement fee that is usually included in the first instalment.
Our advice is always the same: plan your finances. Think carefully about what you need, set a budget with a spending limit and shop around before making a decision. If you defer payment for an item, bear in mind the amounts that will be charged to your account and include them in your budget as an additional expense. Find out the most important terms and conditions applicable to your chosen financing (interest, costs, number and amount of instalments, right of withdrawal, what happens if you wish to return the product you financed, etc.).
And when buying online using your credit card, make sure that the website is secure. Some tips can be found in this post.
Consumer credit is there for when we need it, but it must always be used wisely. Abusive use of financing may lead to overindebtedness, and to long-term consequences that can seriously affect your finances and even your whole life project. How much is your financial peace of mind worth?
Don’t forget: just because something is easy and convenient to buy and easy and convenient to finance does not mean that it will be easy to repay.