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The Truth Behind ‘Buy Now, Pay Later’: Is It Boosting Your Credit? - YouTube
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this morning in our consumer
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confidential how to keep your credit in
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check while inflation continues to hit
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hard at home and in our wallet sharon
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epperson is cnbc's senior personal
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finance correspondent and we always look
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forward to having you here because
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always good to be here make sense of all
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of this for us so i mean i'm trying to
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wrap my head around the fact that you
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know these interest rates are rising as
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an effort to curb spending but the price
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of things is so high anyway so how is
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this all affecting
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all of us well it's affecting all of us
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because our wages are not keeping up
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with inflation cnbc recently did a
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survey showing that two-thirds of
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americans say that inflation has
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increased faster than their salary at
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the same time the reports that are
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showing that many americans 60 almost
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are living paycheck to paycheck and as
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they're doing that many may be turning
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to credit cards to try to pay for
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day-to-day expenses at the same time
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those credit card interest rates are
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rising like you said on a new card over
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20 is what we're seeing as the average
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rate on a new card so you really need to
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work to try to lower that rate right
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just ask people don't even try that but
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call the card issuer and ask most of the
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time you'll get a lower rate but most
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people don't even try and you also may
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want to try switching to a zero percent
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balance transfer card okay that will
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give you zero percent interest for 12 to
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15 months maybe even longer so as long
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as it has a good credit score you should
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probably qualify for okay so that would
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be one way to save money we'll go to
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this next panel because i feel like
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there are a lot of hidden fees that
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we're getting hit with that we're not
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even aware of say you know going out to
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a restaurant well when you get that um
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you know cash adjustment type fee
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because you've used your credit card
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that lets you know that that merchant
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would prefer to use cash and you may see
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that cropping up so using the plastic
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may actually cost you more than you
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realize at some points still at a gas
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station exactly and that's how people
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are getting their balances
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higher than they expected about 500 more
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is the average bounds right now than a
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year ago about 5 200 so to manage those
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balances you want to create a budget you
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want to make sure you have an emergency
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fund start pay with one month's worth of
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living expenses work your way up to six
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months use a limited number of credit
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cards just one or two you don't need
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more than that and then also make sure
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you use a small percentage of the credit
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that's available to you to use per card
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keep that credit usage low below 30
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percent if you can that leads me to my
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questions spin on around here you talked
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about see most people if they have a
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five thousand dollar credit limit they
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use it up to five thousand exactly let's
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talk about how to avoid delinquencies so
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30 to 90 days late that's when you're
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delinquent you don't want that to happen
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you need to know when your bills are due
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and so to do that set up auto pay have
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those payments made directly from your
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bank account afraid because they say no
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i want to control it i may not have it
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this month right now i don't want them
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to take it automatically but when you do
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it it really just locks it locks it in
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and so the way that you know you're
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gonna have it is you put the calendar
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reminder in your phone for when it's due
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and also when that money's coming out of
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your bank so you're not trying to buy
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something extra on that day and then try
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to pay the balance in full every month
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but at least pay more than the minimum
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amount too okay i have a question for
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you is it better to let's say you have a
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high interest credit card should you
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just keep paying on the credit card or
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do you get a personal loan to pay off
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the credit card if the loan rate
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interest rate is lower well you may be
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able to get a loan rate that's lower but
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the personal loan rate is between 3 and
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36 according to bankrate.com so it
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depends on your credit score so it may
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not necessarily be lower then you got to
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worry about perhaps origination fees or
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prepayment fees late fees so are you
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really going to pay off that loan and
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pay on time and then are you disciplined
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enough not to use your credit cards
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again right you wiped out the balance
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then you add it up again and you want to
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make sure that you do get the lowest
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rate possible so keep your credit score
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as high as you can okay
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speaking of credit let's talk about
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buy now pay later because i feel like i
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see it everywhere i now pay leader what
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do we know about the effect that has on
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on folks credit or does it well i think
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a lot of people don't understand how it
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works and about 80 percent of consumers
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according to one survey that used by now
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pay later are doing it to avoid credit
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card debt they may think it's boosting
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their credit score making regular
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payments with buy now pay later but the
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credit bureaus don't get that
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information the information they do get
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is when you're late so you want to make
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sure that you don't do that because that
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can be something that's negative on your
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score keeping your score up making sure
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that you're paying your bills on time
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making sure that you're using as little
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of that credit utilization as possible
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is really key don't get it more credit
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than you need and then there's help out
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there if you need a free consultation
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with a non-profit credit counselor the
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national foundation for credit
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counseling is where you want to go
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nfcc.org.org
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wow we got through a lot there sharon
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thank you so much for more on sharon's
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advice go to today.com
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