Right about now, your mailbox is likely getting stuffed with catalogs for the holidays, and of those, some are offering you “Preapproved” credit of $300.00 or more with your first order… but is catalog shopping really a smart way to handle your Christmas shopping? Truthfully, that depends directly on how you use catalog shopping cards.
At first glance, that preapproved credit line can be very appealing, especially if your credit is less than perfect or if you don’t have enough money saved to actually pay for holiday shopping. But should you actually take advantage of the offers in your mailbox or should you consider alternatives?
Obviously, if the offer in your mailbox is from a well known, respected catalog merchant, like a Fingerhut Credit Account issued by WebBank, then you’re probably safe in sending an order in based on what’s in the catalog, but if you don’t recognize the catalog merchant or it’s just an application for credit, I’d be a little leery of sending in a written credit application. Instead, find the merchant online, read any independent reviews you can find, and apply online once you’ve determined that the vendor is legitimate.
Applying online is also typically faster as most applications get near immediate responses AND once you’re approved, you can usually shop the same day. However, it’s best to take your time, study the products you’re interested in, study the pricing, and then decide how you’ll pay for what you plan to order before you actually place the order. You don’t want to be surprised by the payment terms (or interest rates) when the bill comes in after the holidays are over. Some sites, like Fingerhut, actually post the monthly payment that you’ll need to make along with the full price of the item, so you can determine if you can afford the payments.
Personally, I prefer to make a plan to pay off the account balance early if at all possible, so that I can save money on the interest rate AND see the little bump that I get on my credit score when I pay a balance in full. But in the event that you can’t pay it off early, then do try and pay extra when you can so that you, too, can save a little on the interest rate over time.
Remember, catalog shopping in itself can be a lifesaver when you don’t have the cash to buy the things that you need to buy, but you want to be a smart catalog shopper and use your credit wisely above all else.
Here are the most popular catalog shopping sites: