Cyber Monday can be really exciting. There are new products that have been released for the holidays, and there are so many great deals. The temptation for gamers is to pull out the credit card, not taking into account the future ramifications of that choice.

At Colony Associates, a firm that specializes in helping consumers who are plagued with heavy debt, we have some suggestions for gamers about the use of credit cards on Cyber Monday.

The simple answer is that credit cards can conveniently and safely be used to purchase video games when you know you will be able to pay off the balance when the next bill comes.

High Interest

According to Nerdwallet, credit cards 10 years ago averaged around 13 percent interest. As of November of 2019, that figure is over 21 percent. At interet rates so high, you will bbe paying quite a bit more for your games and devices, if you don’t pay off the balance before interest accrues.

Also, when the interest rates are that high, it becomes next to impossible to pay off the balance. People with high balances end up mostly paying interest every month, unable to pay off any of the principle.

High Credit Utilization

When you go to apply for really important items in your life – like a home loan, an automobile loan or an apartment – you will find that being over-extended on your credit cards will keep you from getting the best interest rates. It may even create a situation in which you are turned down for a loan.

TThe reason for this is that lenders consider borrowers to be credit worthy when they are not utilizing the majority of their credit lines. This is called your credit utilization ratio. According to The Balance, a good credit utilization ratio is around 30 percent. So, you really want to make your credit card purchases that will put you into greater debt with great care.

What if You Are You Already Heavily in Debt?

Budget

If you already have spent too much on your gaming hobby and have high credit card debt, you need to step back and make a budget.

Your budget needs to take into account all of your monthly debt payments and other expenditures. You need to set aside money monthly for annual expenses, like car registration, maintenance and repairs.

You also need to take into account your longer-term desires, like saving monthly for a house down payment or for retirement. This will all help you decide how much you can really spend on gaming and still live the lifestyle of your dreams.

Cut Expenses

Find places you can eliminate expenses that are really luxuries. Today, there is really no need for all of those expensive cable televion packages when we have Netflix and YouTube. Also, add up how much you can save monthly if you don’t go to Starbucks. Saved money can go to paying down your debt and freeing yourself of those interest payments.

Pay Highest Debt First

Another way to lower your interest payments each month is to pay down the debt with the highest interest first. This will help you pay more of the balance when you begin attacking the next-highest interest debt.

Lower Interest Payments

Zero-Percent, Balance Transfer Credit Card: If you could pay off your credit card debt in a year or so, if you didn’t have to pay interest, apply for a zero-interest, balance transfer credit card. It will provide you 12 to 18 months of interest-free credit.

Personal Loan: If you are more heavily in debt, you can get a personal loan from Colony Associates that will allow you to make one monthly payment at a lower interest rate. This type of loan will provide you a longer loan term, so you will have a lower payment each month.

If you are in heavy credit card debt, call Colony Associates, we provide solutions to borrowers that are struggling with high interest rates