Tuesday, November 29, 2005

Financing Your Gift? Beware Of Hidden Fees

Financing Your Gift? Beware Of Hidden Fees
The average American couple will spend $1,476 this year in holiday gifts, food and decor, according to a recent survey by the National Retail Federation. Many spend three to four times that amount from November to January. That said, during the nations busiest shopping season of the year many consumers will be seeking to finance gifts via credit cards, mortgage refinancing and equity lines of credit...

Today's Low Rates
Avg. Rate Points APR
30 Yr Fixed 5.76% 0.64 5.93%
15 Yr Fixed 5.33% 0.65 5.61%
1 Yr ARM 4.47% 0.55 6.81%

...Some shopper will be completely unaware of the hidden fees andoverall costs of financing extravagant gifts. That said we've put together a list of fees associated with loans used to cover debtacquired from gift giving. Compare and save.

Gifts purchased using... Added fees and charges
Credit Card 10-20% more
Refinancing 6.50-8% more
Home Equity Loans 7-9% more

From the above those who have already refinanced their home mortgages and held funds for gifts may do better in the long run. Still the best approach is not to finance gifts at all.

An alternative is prepaid gift cards. These average $25 per card without fees.