Tips From The Consumer Rights Unit

Be A Smart Consumer This Holiday Season

Avoid Seasonal Solicitations - Beware of those attractive low introductory rates you receive before the holidays. The fine print in credit card contracts is filled with traps to catch the unwary. An introductory 0% interest rate can quickly leap to over 20% with just one slightly late payment. If you are going to use a credit card, shop around for one with a long-term low interest rate (APR), and read on to find out what you're in for.

Don't Let Your Guard Down - Once you choose a card, your credit card company can still change the rules if it wants to – including the interest rate. Read your mail - a nondescript mailing may include a change in terms relating to your interest rates, fees or due dates. The company can even change your interest rate on debt you've already accumulated.

Rent-to-Own = Concealed Costs

Deceptive Deals - Rent-to-own contracts for appliance and other major purchases are deceptive and costly. You could pay two and one-half times more for a product by renting it than you would if you simply bought it at a retail store. In fact, the rent-to own outlets don't even tell you how much of your monthly payment is interest - so beware.

Don't Miss a Payment - If you do miss a payment to the rent-to-own store, the item is likely to be repossessed, leaving you with nothing for the payments you have made up to that point.

The Comeback of Layaway Plans

Paying Patiently - Layaway plans are a good way to give your credit card a rest. The good news is that stores usually do not charge interest or large fees for this service.

Know the Details - Before making a purchase on the layaway plan, find out what the layaway fees are and what happens if you miss or are late with a payment. Do you lose all of your past payments if you miss one? Is there a cancellation fee if you change your mind?

Debit Cards - The Pros and Cons

It's Your Money - With a debit card, you are spending money in your own bank account, unlike a credit card where you are borrowing money that you have to pay back later, along with interest and fees.

There's Less Protection - You have much less protection if a debit card is lost or stolen. Also, with a credit card, you have protections if you get in a dispute with a merchant.

Abusive Overdraft Fees - If you use a debit card to make purchases, make sure you don't spend more than you have in your account. Your purchases may be approved, but the bank can hit you with an overdraft fee of as much as $39 for EACH over-limit purchase, no matter how small. Many banks will automatically enroll you in an overdraft "protection" program where they'll approve your purchases at a store -- or a withdrawal at an ATM -- and then sock you with a hefty fee each time you make a purchase.

Sources: Americans For Fairness In Lending (AFFIL) , Greater Boston Legal Services