Doing your holiday shopping with a credit -2-

If you know that you can pay off your purchase within the introductory no-interest period, "that can be a phenomenal tool," Blancaflor said, "But whatever the card's specific intro period is, if you don't pay it off between that time, you're stuck with the interest at the end of the line."

6. Approach buy-now-pay-later with caution

If you're wary about opening up a new credit card but still want to pay your holiday shopping bill in installments, you might be tempted by buy-now-pay-later loans, an increasingly common payment option. Also known as "pay-in-four" loans - though loan terms can vary - these typically come with no interest.

Read more: Klarna goes public as more people say buy-now-pay-later is the only way they can afford to buy things

However, the ease of stacking up multiple small loans simultaneously can make the overall debt unwieldy, Schulz said, especially for new or financially strained users. Missing a payment, even by a few days, can trigger a late fee that negates the benefit of the interest-free structure.

The consequences of missing a payment have intensified as data-analytics company FICO (FICO) launched new credit-scoring models in June that incorporate buy-now-pay-later data. This means that repayment behavior, including missed payments, can now directly affect your credit score, raising the financial stakes of falling behind.

"Just because people will lend you money doesn't mean that you need to take it - or that you can afford it," Schulz said.

What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission.

-Genna Contino

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

11-22-25 1109ET