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How to Manage Credit Card Debt When Holiday Shopping

And, he advised, include savings on your “spending” list, and set aside some cash. That way, you’ll have some reserves when those holiday bills come due.

Here are some questions and answers about managing holiday spending and debt:

Keeping the lid on card spending is especially important because interest rates are rising, meaning that it will be more costly if you carry balances from one month to the next. The average credit card rate tops 19 percent, up from about 16 percent early this year, according to Bankrate.

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Buy now, pay later services, including Afterpay, Affirm and Klarna, are increasingly popular. More than a quarter of Americans have used them, and most are satisfied with them, according to a new survey from Consumer Reports. The short-term loans, typically offered online at the point of sale, allow borrowers to pay part of the purchase up front, and pay the balance in several fixed payments.

But there’s reason to be cautious in using the services. Users may not consider it a form of credit but, Ms. Ellis said, “It’s still debt.” The loans are easy to get, so people may take out several — and then have trouble juggling them. Consumer Reports found that people who had four or more of the loans at once missed payments at twice the rate of those with fewer loans. The survey also found that 10 percent of people who have used these services reported having difficulty getting refunds or stopping payments for items they never received.

If you can’t pay your balance in full, pay more than the minimum required payment. Otherwise, you will take longer to eliminate your debt and pay much more in interest. “Have a rule of thumb,” Mr. Wright said, like paying $10 more than the minimum or double the minimum.

A series of studies by researchers at institutions including The Ohio State University found that people who were able to choose particular purchases to repay — such as coffee at Starbucks or a utility bill — paid more toward reducing their debt. The technique increased awareness of what was being repaid, leading to a perception of greater progress toward reducing debt, a report on the experiments said.

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Grant Donnelly, an assistant professor of marketing at Ohio State who was one of the authors of the report, said some credit cards, including offerings from American Express and Chase, have options for users to choose specific purchases to pay over time. But they may charge a fee to set up the payment plan.

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