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This holiday season, many people are worried about the economy. Unemployment and other issues are causing a certain amount of worry. And many people want a little extra to make the holiday season a little brighter. So it is no surprise that the "skip a payment" offer from lenders and others is so appealing at this time.

Back when I had a car loan, this was routine: I received a letter in the mail, encouraging me to — for a low $25 fee — skip my December car payment. I could do it for January as well if I wanted (for another $25 fee in that month). Some years, it was tempting. $25 instead of $200? I never took it, though.

Skip a loan payment doesn’t mean you don’t pay

Lenders aren’t being nice. You will still pay that money. The lenders pocket the fee and then add your entire payment to the end of the loan. They’ll even capitalize the interest so that is added to the total as well. So, really, when you "skip a payment", you are actually deferring the inevitable — and you are actually paying more in the long run.

It can be tempting to use skip a payment to buy a few extra gifts this holiday season, but that’s really not the best option. Instead, join the 67% of Americans that say they are cutting back on their holiday spending, and look for other gifts that can be given instead.

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